Yahoo Ethics Case Study Essay

Introduction

Yahoo Inc. (Yahoo) is one of the most well-known global Internet search engines, which has developed 24 international sites in 13 languages. In 2001, Yahoo was sued by French Nazi concentration camp survivors for allegedly justifying the Holocaust through its website. Yahoo’s lawyers demonstrated that the French court lacked jurisdiction over a US-based company and the content on Yahoo’s website was by the protection of free speech. Yahoo began excluding Nazi items that were displaying or selling on its auction sites while refused to screen users by nationality.

This rejection incurred wide-spreading discontent and brought the discussion on the extraterritoriality.

Stakeholders

Timothy Koogle, chief executive officer of Yahoo Inc., was the one to decide whether to accept the injunction from the French Court which required blocking French users’ access to hatred content on Yahoo’s US-based servers. In 2001, Koogle was charged with war crimes for allegedly justifying the Holocaust through Yahoo’s website and he faced incarceration in France. La Ligue Contre le Racisme et L’Antisemitisme (LICRA) sued the Yahoo Inc.

for its violation of French law. In LICRA’s view, the availability of Nazi contents on Yahoo’s English-language site also constituted a crime even Yahoo prohibited these racial hatred materials on their French-language portal. The French court ordered Yahoo to dissuade and make impossible for any Nazi merchandise sales through Yahoo’s auction site. Meanwhile, it also required Yahoo to block French users from accessing any questionable content.

The U.S. court demonstrated that the French order violated constitutionally protected free speech in the United States. The district Judge Jeremy Fogel declared that the U.S. court, as a more efficient and effective forum, had jurisdictional authority over the French defendants. The purveyors of hate used the Internet to disseminate their views since it was cost-saving and extensive. Shielding hate groups’ websites would be an obstruction to the Nazi propaganda as it decreased visitors to these hates sites. Survivors of concentration camps could own justice if Yahoo blocked these hate sites and admitted the crimes of the Holocaust. Young people would benefit from Yahoo’s blocking of hates sites since many neo-Nazi sites distributed games and rock CDs to capture the minds of the youth. Shielding prohibited sites also make anti-hate organizations work easier.

Changes

In 1995, Yahoo Inc. was created in the United States. One year later, Yahoo France, a 70 percent-owned subsidiary of Yahoo Inc., was established and became the most popular portal in France. Yahoo built independent local-language directories websites and content for each of their international market. By 2001, Yahoo has experienced great success in global expansion with approximately 40 percent of users located outside the United States. In 2000, the dot-com stock market crash caused many companies to reduce costs by cutting advertising budgets. As a result, Yahoo’s advertisement revenues decreased by 42 percent and the company shares fell 92 percent. Many leading executives, including Timothy Koogle, declared that they would be replaced. Also in 2000, LICRA sued Yahoo for the violation of French law since Yahoo allowed users to post Nazi-era memorabilia for sale on its auction site. The French court ordered Yahoo to block French users from accessing the banned content.

But Yahoo denied this jurisdiction and justified itself as a protector of free speech. At the end of 2000, an Australian citizen of German origin, Toben, was sentenced to 10 months in prison by the German court because he operated an Australian website to promote Nazism and directly targeted on Germans. Later in 2001, German prosecutors charged Yahoo Germany for hosting Mein Kampf on its GeoCities Web hosting service. International conventions kept seeking greater cooperation on the extraterritoriality. The Hague Convention, which has 52 member nations including the United States, required member states to comply with the local jurisdiction where the business operates. Since the early 1980s, neo-Nazis and white supremacists had started using the Internet to provoke people. There were approximately 800 websites promoting Nazism and the majority of them were physically located in the United States. Besides, hate sites even directly targeted on children and teenagers.

Ethical issues

Obligation to exercise social responsibility. The accessibility of ethnical hatred websites has bad social influence in some European countries like France because of the legacy of WWII. Yahoo obligates to respect the communities where it does business because Yahoo’s attitude actually has impacts on a substantial number of people. It is also vital for Yahoo to provide a healthy and safe Internet environment to protect the youth from being misled by distorted views. Obligation to protect freedom of speech.

Yahoo argued that it would limit freedom of expression if they blocked hates sites or screened people by nationality. The free speech is highly valued in the United States but is viewed as offensive or inappropriate elsewhere. Yahoo, as a US-based company, obligates to protect freedom of speech. Obligation to enforce international law. The Hague Convention, which sought greater cooperation in international law enforcement, has 52 member nations including the United States. Although the treaty has not been passed, Yahoo, as a US-based company, was expected to comply with the local jurisdictions where its business operated.

Alternatives
Alternative #1 – Blocking all hates sites

Yahoo can choose to block all hate sites. As an influential Internet search engine provider, screening these websites obstructs the growth of neo-Nazis and white supremacists, which helps bring a healthy and democratic Internet environment. Yahoo could gain good ethical reputation by exercising its social responsibilities to protect young people from receiving distorted and racist views. This method also represents that Yahoo justifies the position of the concentration camp survivors and respects to the French culture. The compliance of the French law contributes to the establishment of Hague Convention Treaty, which requires members to comply with local jurisdiction where it operates business. Nevertheless, this alternative may incur dissent since it challenges people’s right to free speech, which is highly valued and strongly supported in the U.S.

Alternative #2 – Accept the order from the French court

Screening users by nationality can prevent 90 percent of French users from viewing Yahoo’s questionable content if Yahoo adopts the geolocation software and, at the same time, asks users for their nationality. The court also required Yahoo France to inform users of potential risks before enabling them to proceed with searches on Yahoo.com. By following the order from the French court, Koogle has no risk of incarceration. This action helps to prevent potential rebirth of white supremacy since lots of users who are interested in these websites are blocked. Meanwhile, it shows that Yahoo Inc., as a US-based company, is willing to corporate with the Hague Convention to resolve its international disputes. However, limiting users to view some content and preventing them from expressing opinions freely may violate human rights to freedom of speech in the opinion of the U.S.

Alternative #3 – Do not accept the order from the French court If Yahoo refuses to accept the order from the French court, the hates sites will continue to be accessible to users all over the world. Meanwhile, more than 150 neo-Nazi websites will also be maintained through Yahoo’s GeoGities web hosting service. Although Yahoo can ignore the French court’s injunction by justifying itself as a protector of free speech, Koogle is at a high risk to be imprisoned in France. Moreover, maintaining these hates sites and allowing them to justify the crimes of the Holocaust give rise to racist opinions, which also results in bad social influence, particularly to those who had war legacy, like France. Since most hates sites target on young people, not blocking these sites may mislead children and teenagers as well. Finally, Yahoo’s rejection of the French court’s ruling goes against the purpose of the convention on jurisdiction.

Choice of alternatives – Blocking all hates sites

Blocking all hates sites will be the most moral choice. There is almost no financial cost for Yahoo whichever alternatives they choose. Therefore, it is just a matter of business ethics. Blocking hates sites prevents the young people from being targeted and provides them a healthy and safe Internet environment. Meanwhile, this choice shows that Yahoo cares about their social influence and respects different cultures and histories, which brings Yahoo a good reputation that will make benefits in the long run.

It also helps American companies get involved in the enforcement of international law which requires member nations to comply with local jurisdiction when operating overseas. Despite the guarantees of free speech, reasonable limitations exist when the “free speech” denies the mutual values of all human beings. Protecting the right of minorities from being affected by racial bigotry, vilification and abuse is more important than arguing the rationality of promoting Nazism and Racism. Indeed, Yahoo can institute an “acceptable use” policy to prohibit users from posting racist messages. This policy is usually contained in the “terms of service”. When people sign it, they are actually signing a private contract which is not protected by free speech. In this way, prohibiting people from disseminating hateful messages is actually not violating the freedom of speech but doing business ethically.

Reference

Wesley, D. (2002). Yahoo v. Survivors of the Holocaust. In D. Sharp (Ed.), Cases in Business Ethics (pp.128-140). California: Thousand Oaks.