Hong Kong was a “safe harbor” for technology companies closed to China. Not anymore

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But new law that gives Hong Kong authorities broad powers to regulate online content could put these companies on a collision course with this censorship mechanism, known as the Great Firewall – and force them to leave Hong Kong. .

Under national security law that came into force last week, Hong Kong police may require online platforms and network providers to remove content or limit the security of China access to their services. If they fail to do so, company officials could face close to $ 13,000 in fines and six months in prison.

This has great implications for technology companies that use the city as a regional base due to its relative openness and proximity to China and the Asia-Pacific region, even though its approximately 7 million inhabitants are not a significant part. of their users.

“It’s not a huge market, but it is symbolically important,” said Adam Segal, director of the digital and cyberspace policy program at the Council on Foreign Relations.

Caught in the middle

Companies are already reacting. Facebook (FB), Twitter (TWTR), Google (GOOGL) and Microsoft (MSFT) were among those who said this week that they would temporarily stop honoring requests for government data about their Hong Kong users, while TikTok – owned by Chinese company ByteDance – has decided to shut down its platform completely .

“Businesses would be concerned about the impact this has on their users, employees and managers – as well as global concerns that they would actively facilitate human rights violations that occur in this context,” said said Raman Jit Singh Chima, director of policy for Asia at Technology. Advocacy group Access Now. Chima and other experts say companies are likely to wait and see how far China will go in its crackdown on the Internet from Hong Kong, but exits from the city remain a possibility.

“They can wait to see if the government makes a request, but then they will be forced to decide, and departure is likely,” said Segal.

The loosely worded law also contains a provision which states that it would also apply to offenses committed outside the region “by a person who is not a permanent resident”, potentially giving China the opportunity to take action. measures against any post against Hong Kong on any platform anywhere.

“I think this is supposed to be a general deterrent to people around the world, not just high tech companies in particular,” said Scott Kennedy, China’s economic policy expert at the Center for Strategic and International Studies.

And while this may lead to a certain degree of self-censorship abroad, Kennedy says there are questions about China’s ability to actually enforce its rules on technology platforms outside of its own territory.

“This is something that goes far beyond the Chinese, and I think they would generate more hindsight,” he added.

Facebook, Twitter and Microsoft have said they will continue to review the law and its implications for their businesses.

“Our teams are re-examining the law to assess its implications, especially since some of the terms of the law are vague and unclear,” a Twitter spokesperson said in a statement.

A Facebook spokesperson said the company would “further assess” the law in consultation with human rights experts. “We believe that freedom of expression is a fundamental human right and support the right of people to express themselves without fear for their safety or other repercussions,” added the spokesman.

“As with any new legislation, we are examining the new law to understand its implications,” a Microsoft spokesperson said in a statement.

Google, which also has operations and users in Hong Kong, did not respond to requests for comment.

Facebook, Google and Twitter will not provide user data from Hong Kong authorities at this time

Although these three companies are largely cut off from mainland China, the law could also have implications for businesses, such as Apple (AAPL) and Microsoft, who have a lot more at stake, according to Steven Feldstein, a non-resident fellow at the Carnegie Endowment for International Peace. Both companies have large manufacturing bases for their hardware products in China, which is also one of the world’s largest markets for iPhones.

“These companies, especially Apple, are really interesting because they have a lot more to lose, especially given the amount of hardware they sell in terms of the iPhone as well as their manufacturing,” said Feldstein. “I don’t know exactly where they’re going to end up … unless there is a lot of public pressure, it’s easy to imagine a scenario where they’re also trying to make their way. ”

Apple has been stuck between China and Hong Kong in the past, most recently last October when it deleted a mapping app from its App Store that the city’s pro-democracy protesters used to track police movements. .

The company did not immediately respond to a request for comment on Thursday, but said in a statement to Bloomberg earlier this week that it was “assessing” the law.

Safe port

Internet freedom in Hong Kong is the product of a 1997 agreement between China and Britain, which returned territory to the Chinese government on a principle known as “one country, two systems” according to which the city “would protect the rights and freedoms of its residents” “for a period of 50 years. But Beijing has been tightening its grip on these rights and freedoms for several years, and many fear that the national security law is another big step in this direction. Several countries, including the United States, the United Kingdom and Australia, have criticized the law, with some warning their citizens against visiting Hong Kong because of this.

“It is clear that the Chinese did not want to pass it just to create the illusion that they controlled Hong Kong,” said Kennedy. “They really want to control Hong Kong and change the facts on the ground. ”

The blockade of China has not stopped Facebook and Google from trying to make inroads, with Facebook CEO Mark Zuckerberg’s repeated trips to Beijing in recent years, which has drawn criticism. Google was forced to backtrack on plans to build a version of its search engine in China in 2018 after widespread outrage over what was perceived to be aid to Chinese censorship.

Hong Kong's security law could deter press freedom

Many tech companies could now consider an exit, with analysts pointing to Singapore as one of the main alternatives if they are forced to leave Hong Kong. Many tech companies are already present in Singapore, although the Southeast Asian country has its own freedom of expression issues.

” And [Hong Kong is] a regional hub for you, or you’re there specifically because of the safe harbor it offers because of the rule of law… it’s a challenge for you, “said Kennedy. “I wouldn’t be surprised if every [US company in Hong Kong] think about their location options, and so do all of their employees. ”

In the meantime, Hong Kong has a taste – if not the full impact for now – of life in the Great Firewall, and businesses will be on their guard.

“Even Hong Kong lawyers are unable to provide clear advice or guidance on what would constitute an offense – the provisions are so broadly designed that they are capable of capturing even benign behavior such as slogans”, said Sharron Fast, Deputy Director of Journalism. graduate program at the University of Hong Kong.

“Censorship is approaching,” she added, “and if the breathtaking pace we witnessed implementation … is any indication, it will happen sooner rather than later.”

CNN Sherisse Pham, Eric Cheung and Isaac Yee contributed to this report.

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