Earlier this year, Senator Grassley (R-IA) asked the U.S. International Trade Commission (ITC) to do a fact-finding investigation on (1) foreign censorship practices that impede trade or investment in key foreign markets and (2) trade and economic effects of such policies and practices on businesses in the United States and their global operations. The ITC accepted this request. Subsequently, on April 7, Senator Wyden (D-OR) submitted a follow-up request, in which he asked the ITC to divide its report into two volumes:
1. Identification and descriptions of various foreign censorship practices, in particular any examples that U.S. businesses consider to impede trade or investment in key foreign markets. …
2. To the extent practicable, including through the use of survey data, an analysis of the trade and economic effects of such policies and practices on affected businesses in the United States and their global operations. …
On May 6, the ITC announced that it had accepted this request and would issue two reports, as follows:
Inv. No. 332-585, retitled Foreign Censorship Part 1: Policies and Practices Affecting U.S. Businesses (to be issued by December 30, 2021)
Inv. No. 332-586, Foreign Censorship Part 2: Trade and Economic Effects on U.S. Businesses (to be issued by July 5, 2022)
On July 1, the ITC held a public hearing on these investigations. The actions of China with regard to censorship, both at home and abroad, were a key topic of discussion, although the witnesses and Commissioners also wrestled with broader issues related to how the ITC should examine the impact of foreign censorship. A transcript is not available yet, but this post offers a brief sampling of some of the statements made by the witnesses and the questions asked by the ITC Commissioners. (We will follow up on this post when written submissions and the hearing transcript are available.)
Suzanne Nossel of PEN America argued that the main reason for China’s censorship is “regime perpetuation”:
It is essential to recognize Chinese censorship for what it is: A system of domestic dictates that has been extended in an attempt to shape global attitudes and perceptions. The raison d'etre of the Chinese Communist Party (CCP) censorship is regime perpetuation. To allow criticism, skepticism, or exposure to political alternatives within the main mass is seen as a threat to CCP rule. …. Increasingly the CCP sees regime survival as intended not only on constricting speech within China, but on dominating the global narrative about China.
Dr. Nathalie Maréchal of Ranking Digital Rights emphasized the role of the Great Firewall and other "information control strategies":
Today I will talk about four broad information control strategies: technical barriers to access, content removals within social media platforms, measures intended to cause chilling effects or self censorship, and online influence campaign.
The most blatant technical barriers to access are network shutdowns and disruptions. … China's Great Firewall which prevents internet users in mainland China from accessing a broad range of foreign websites is a classic example.
Dr. Aynne Kokas of the University of Virgina considered censorship a trade barrier, and discussed how the policy has influenced US firms’ practice in China:
US firms are more dependent on access to the Chinese market today than at any other time since 1949. Yet constraints to market access in China are increasing daily. What this has created is a landscape where US firms must choose between complying with Chinese market access restrictions and failing to maximize their global market share and their responsibilities to shareholders. Without US government intervention on acceptable standards and practices related to censorship by US corporations operating in China … paired with robust trade agreements protecting Chinese market access for US firms, employees of US corporations will constantly face market pressure to be complicit with Chinese government censorship efforts.
Dr. Maria Repnikova of Georgia State University discussed the shifts in China’s information governance:
In the context of China and other non democratic regimes, it is also important to consider the censorship works in tandem with surveillance, propaganda and cyber nationalism in shaping the contours of communication for domestic and international entities alike. In today's testimony, I explain the latest shifts in China's information governance, in its core dimensions -- censorship, surveillance, propaganda, and cyber nationalism -- and their potential implications preparations of US companies.
Dr. Susan Aaronson of George Washington University warned of the consequences of censorship, especially in the context of international trade law:
Why is censorship a trade barrier? First of all, we see growing evidence that when governments or firms … censor they may impede market access, discriminate among foreign and domestic providers of information, and impede business operations. Moreover, when firms or government censor, their rationale is often opaque, and in so doing, when governments censor, they undermine the rule of law, transparency, and predictability obligations under the WTO and other trade agreements.
Nigel Cory of The Information Technology and Innovation Foundation called China the “the worst offender” in using censorship to gain economic advantages:
Censorship is becoming a growing non tariff barrier to trade. Countries around the world are enacting overly restrictive and discriminatory laws and regulations around digital content they identify as objectionable. Stakes are high. If we fail to act, the US could lose its edge in the global digital economy.
China is by far the worst offender, using censorship as a barrier to digital trade. And while its primary motivation for censorship is maintaining regime stability, China also gets, and this is what it clearly understands, the ability to protect local firms from foreign competition. And while censorship is not the only restrictive tool that China uses, it is a key one that has led to a generation of Chinese consumers growing up without knowing that there is a consumer experience that is completely different than most other countries.
Rachael Stelly of the Computer & Communications Industry Association noted that censorship has become more common in other emerging economies:
The US business community worldwide is on the frontline facing government censoring, filtering, and blocking of internet content. This has long been the case in restricted markets such as China, but it's becoming increasingly common in emerging digital markets, and also through different tools and novel methods to undermine access and speech online.
Timothy Brightbill of Wiley Rein called China and Russia “the largest offenders” of censorship practice:
I'll summarize my prepared statement which is on the record and make a few key points. First, censorship is a digital trade barrier and a particularly harmful one. And I think censorship and its costs should be defined for purposes of your report to include not only government actions, but responses to government actions by businesses or industries.
China and Russia are the largest offenders and their censorship practices are some of the most oppressive barriers to digital trade.
Daphne Keller of the Stanford University Cyber Policy Center discussed indirect censorship, extraterritorial application, and competition and concentration in the platform industry:
I'm going to try in the time available to unpack three big topics that I think are relevant for the hearing. The first is what the earlier panel described as indirect censorship. The second is extraterritorial application of national speech laws. And the third, which hasn't come up much so far, is competition and concentration in the platform industry, which I will argue connect directly to questions about censorship and foreign government power.
Q & A:
During the Q & A, Dr. Aaronson noted: "I am deeply concerned at this focus only on China. And … I know you're not saying that Commissioner, but so far the discussion has focused on that. So, let me say that more and more governments are taking more and more control of data." In response, Commissioner Kearns said: "You're right, I don't mean to make this solely about China. And I do recognize there are other countries … I point to China because I do think it's harder to distinguish the market economy from the government in China versus in some other markets that we keep our eye on. And I would also note that, you mentioned Ethiopia, and you were talking I think about blocking the internet, so it's a little bit different. But to me, when China goes to a large international company and says, we don't just want you to change what you did -- that's the extra-territorial issue -- we just don't want you to change what you're doing in our country, we want you to change your terms of service, so that we don't get any bad press anywhere in the world on this. China can do that in a way that Ethiopia can't, and I do think we need to be cognizant of that."
Commissioner Stayin later asked the following question: "Has the China model of restraint, is this being adopted in other countries around the world, as a basis upon which they set up their own model of censorship?" Dr. Repnikova responded as follows: "I think there is, as I mentioned, as inspiration towards adopting some of these policies and practices that China has been carrying out for many many years. But when it comes to specifically copying this kind of practices, I don't see evidence the Chinese government is exporting its so called model because it involves such significant human capacity technologies and it's very sophisticated and difficult to export, but also there's no intention to completely export this entire model, I think, of internet governance. At the same time, Chinese companies are increasingly providing surveillance technologies -- or selling them rather -- to many markets around the world, especially emerging markets."