Did Cisco Cross the Decency Line in China?

Don Tennant

It would seem fairly cut-and-dried that U.S. companies operating abroad need to abide by the laws of the countries in which they operate. Even so, when Google launched a search service in China in 2006 and agreed to abide by Chinese censorship laws, a lot of people in this country had a problem with that. I am not one of those people, but I do think there's a moral line that U.S. companies shouldn't cross. And Cisco Systems is alleged to have crossed it.


The New York Times recently reported that Cisco's operation in China is alleged to have marketed its technology to Chinese authorities as a means of monitoring the activities of the Falun Gong, a spiritual movement that the Chinese government considers to be a subversive group. Cisco's alleged willingness to help Chinese authorities track the members of groups it doesn't like isn't a new development. According to the Times article, it was first documented in 2004 in the book, "Losing the New China: A Story of American Commerce, Desire and Betrayal," by Ethan Gutmann. Cisco at the time didn't deny that such marketing materials were produced, but dismissed them as the work of a low-level employee.


What's new in this saga is that several Falun Gong members have filed a lawsuit against Cisco in the Federal District Court for the Northern District of California, alleging that Cisco went well beyond simply helping to design the "Golden Shield" firewall that China uses to censor the Internet. Here's an excerpt from the Times article:

The suit claims that additional Cisco marketing presentations prove that it promoted its technology as being capable of taking aim at dissident groups. In one marketing slide, the goals of the Golden Shield are described as to "douzheng evil Falun Gong cult and other hostile elements." Douzheng is a Chinese term used to describe the persecution of undesirable groups. It was widely used by the Communist Party in the Cultural Revolution.


The 52-page lawsuit describes the Golden Shield as a system intended to censor Internet traffic flowing into China, and to identify and monitor opponents of the Chinese government. The suit states that Falun Gong members who used the Internet were tracked by the Golden Shield and then apprehended.


Members of the group who were arrested were tortured, and one member was beaten to death, the lawsuit says. Another plaintiff who was arrested has since vanished, the suit claims, and is presumed to be dead.


The lawsuit challenges Cisco's assertion that it did not help design the firewall system or customize technology that it sold to meet government surveillance and censorship requirements.


Terri Marsh, a lawyer for the Human Rights Law Foundation in Washington, said the group had compiled detailed information about Cisco's role in the design of Chinese information centers that host Falun Gong database applications connected to network surveillance and tracking systems. This information will be disclosed in court during the discovery phase of the trial, Ms. Marsh said.


The lawsuit states that other documents lay out design suggestions to the Chinese Ministry of Public Security on how to pursue dissidents effectively.

According to the Times article, Cisco is denying all of this, and has released the following statement:

Cisco does not operate networks in China or elsewhere, nor does Cisco customize our products in any way that would facilitate censorship or repression.

In any case, the lawsuit is another public relations nightmare for Cisco, and one it hardly needs as it gears up for what analysts expect to be the biggest layoff in its history, doing so as one of the country's biggest sponsors of H-1B visas (see "Will H-1B Visa Holders Feel the Pain of Impending Cisco Layoffs?"). In that case, I called on Cisco to do the right thing, and ensure that U.S. workers get the consideration and fair treatment they deserve. In this case, if there's any merit to the allegations at all, it's too late for Cisco to do right by the Chinese people.

Add Comment      Leave a comment on this blog post
Jun 6, 2011 9:54 AM R. Lawson R. Lawson  says:

"but I do think there's a moral line that U.S. companies shouldn't cross. And Cisco Systems is alleged to have crossed it."

I agree, but how do we define a U.S. company in this day of global mergers and multinational corporations?  What, besides their good name, prevents companies from engaging in unethical (though technically legal) behavior?

Because the media controls the message, and the media is corporate owned (I believe statistics were that 6 companies control 95% of the media in the United States) and they need corporations to advertise, they have disincentives from reporting any bad corporate behavior.  I'm sure Cisco has been an advertiser in this very publication and I would speculate that crossed the minds of editors before allowing your blog to publish (correct me if I'm wrong).

I just don't see corporations being held accountable for their behavior.  Now, if Cisco slighted investors I'm sure we'd all hear about it.  But slighting their host nation?  Doesn't seem to be that serious of a business problem. 

I think we must have more than some unenforced body of ethics controlling corporate behavior.  They obviously have absconded themselves from making ethical decisions, and always side with profits.  If profits are their "guiding light" we need to make bad behavior unprofitable.

Jun 7, 2011 7:32 AM jeff forsythe jeff forsythe  says:

People forget exactly what the Chinese Communist Party (CCP) truly is. A brutal regime that has murdered 80 million of its own people since 1949 and is concerned with nothing but its own survival.No human rights whatsoever and an enemy of the free world. The only reason any country is dealing with the cruel CCP is corporate greed. The same corporate greed that censors our own media from telling us the truth about the CCP. To learn more facts one may go on line and read The Nine Commentaries. Thank you for your consideration.

Jun 7, 2011 9:54 AM Bob Bob  says:

there is only one moral law in corporations - money

Cisco did this for the same reason they hire H-1bs


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