Google, China & the WTO: Financial Times Brings the Stupid

March 4, 2010

At Tuesday’s Senate hearing on Internet censorship, someone in the press asked Google VP and Deputy General Counsel Nicole Wong about an action against the Chinese government at the World Trade Organization.

Well, the press (again) has taken the bait and is talking about the possibility. The Financial Times kicks their coverage off with this tagline:

If Google chooses to take its case to the WTO, the battle could be both bloody-minded and counterproductive.

Sounds dramatic. I like the blood part.

So, should Google take China to the WTO? Great idea, if the WTO allowed non-Member States entities other than Member States to initiate proceedings. IT DOESN’T!!!

The only participants in the dispute settlement system are the Member governments of the WTO), which can take part either as parties or as third parties.

Come on, this is basic stuff here. Any member of the press that reports on the Google story should actually use Google, although the WTO site is easy to find even without a search engine.

More hilarity. I watched a clip of the FT‘s Ben McLannahan on Bloomberg, talking about the case. Ben writes for something called “Lex” in FT. I’m no Latin scholar, but I always thought “Lex” had something to do with law. Apparently not.

McLannahan made two points during his interview that I found particularly egregious. First, he said that a Google case would be tough to win because:

[D]uring a copyright action brought by the US against China that culminated last year, the WTO confirmed that censorship violated none of its rules.

I think McLannahan is talking about the A/V products case (see links below), which involved copyrighted products that must go through censorship review before they can be marketed in China. While the WTO did note that censorship is not contrary to WTO law, that particular case had very little to do with censorship – I certainly wouldn’t cite it as a censorship case.

Similarly, from a WTO law perspective, the present Google dispute has nothing to do with censorship either. I don’t even think Google has said anything about challenging China’s censorship rules. It’s legal under the WTO and no one is saying anything to the contrary. I have no clue why this was brought up at all; it is misleading.

Second, and worse, McLannahan mentioned that a Google WTO case would involve claiming that Google had received unfair treatment by the Chinese government.

Say what? “Unfair treatment” is not a principle of the World Trade Organization. McLannahan should have said “National Treatment,” which is the only possible issue here. NT cases involve instances where foreign companies/products are treated differently from domestic firms/products, and by “differently” I mean worse.

So McLannahan gets his terms wrong at the outset. But then he goes further, noting that Google has little evidence to show that it has been treated “unfairly.”

What does McLannahan pull out of his hat to show that Google has in fact gotten a fair shake from the Chinese government?

If you look at Google’s market share, it’s been proceeding just fine. In the fourth quarter, it took about five percent off Baidu, that’s the copycat, Chinese Google knockoff.

At this point, my jaw drops. The dismissive statement about Baidu was bad enough, particularly since they rule search here, but market share? We’re not talking about competition law here, for God’s sake. Who the hell cares about Google’s market share if the issue involves National Treatment?

In a National Treatment case, relevant evidence would include laws or regulations that discriminate against foreign companies. We don’t have that here. Also useful would be evidence that government influence over industry operates in a de facto manner such that foreign companies do not have the same rights as domestic firms.

As I’ve said in the past, when this issue first came up, I have yet to hear anyone with any evidence that would support a National Treatment case.

Sorry to be bitchy, and I love the FT, but when you file a story in a section called “Lex,” you gotta at least get the law part right. By the way, Businessweek got it right.

I would also like to reiterate that just because a government does something we don’t like, and even when that action hurts foreign companies, that doesn’t mean that there is necessarily a WTO action.

Related posts:

Will U.S. File WTO Action Over Google Spat?

Censorship As Trade Barrier, Part II

A/V Products Case – Part I

A/V Products Case – Part II