Fund is response to abuse allegations

BEIJING — Yahoo Inc., under fire from civil-rights groups for its indirect role in human rights abuses in China, is answering critics by setting up a fund to give victims of government censorship legal and other assistance.

The webco has been charged with complicity in the jailing and torture of Chinese dissidents, and this week was criticized because Yahoo China, in which Yahoo Inc. has a stake, ran a wanted list of rioters involved in violent protests in Lhasa, Tibet.

The fund, unveiled Tuesday, is a response to these and other such allegations, which have damaged Yahoo’s public image.

Human-rights groups are taking the fund, which has yet to set a value, seriously. In a serious coup for the fund’s credibility, the initiative will be overseen by Harry Wu, a veteran human-rights activist and former prisoner of conscience who is probably China’s most famous political dissident.

Wu said a board of five members should be in place to start administering the fund soon.

“We are committed to making sure our actions match our values around the world,” said Yahoo CEO Jerry Yang.

A Yahoo rep said the company was working to provide financial, humanitarian and legal support to the families of Shi Tao and Wang Xiaoning, two dissidents who were jailed for expressing anti-government opinions online.

After working with the families to reach a private agreement, the parties are withdrawing their lawsuit against Yahoo.

“After meeting with the families, it was clear to me what we had to do to make this right for them, for Yahoo and for the future. Yahoo was founded on the idea that the free exchange of information can fundamentally change how people lead their lives, conduct their business and interact with their governments,” Yang said.

Yahoo sold its direct presence in China in 2005, but retains a 39% stake in Alibaba Group, a Hong Kong-based holding company for a number of Chinese ventures including online-auction and payment services. Yang also serves on the board of directors at Alibaba.

Yang has hinted in a letter to Secretary of State Condoleezza Rice that Yahoo may use the Olympic Games in August to increase efforts to secure the release of dissidents.

China’s human-rights record and lack of free speech makes it a famously tough market to navigate for all the webcos.

Google Inc. was required by the Chinese government in 2006 to limit its local search results after it allowed access to topics including the massacre of Tiananmen Square protesters in 1989.

The webco complied, figuring it was better to be engaged in China than isolated.

“At Yahoo, we believe in the transformative power of the Internet. That’s why we are so committed to working to support free expression and privacy around the world,” said Yang, who was summoned before the U.S. House Foreign Affairs Committee for a public hearing, which focused on Yahoo’s ethical shortcomings.

Yahoo is hoping the Chinese market will become gradually freer, although last week saw major strengthening of the Great Firewall of China as the government tries to keep a lid on news about Tibet.

The key to operating in China is avoiding conflict with the government and there is a major question market whether it is possible.

Despite Yahoo’s effort, there are serious questions about the longterm ability of Western webcos to operate ethically in a country where Internet use is strongly controlled and dissent is not tolerated.

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