US Tech Giants Face Hard Choices Under Hong Kong’s New Security Law

US tech giants face a reckoning over how Hong Kong’s security law will reshape their companies, with their suspension of processing government requests for user data a stop-gap measure as they weigh options, people close to the industry say.

While Hong Kong is not an important market for firms such as for instance Facebook, Google, and Twitter, they have used it as a perch to reach deep-pocketed advertisers in mainland China, where lots of their services are blocked.

But the businesses are now in the cross hairs of a national security law that gives China authority to demand which they turn over user data or censor content seen to violate what the law states – even if posted from abroad.

“These companies have to totally reassess the liability of having a presence in Hong Kong,” Charles Mok, a legislator who represents the technology industry in Hong Kong, told Reuters.

If they refuse to cooperate with government requests, that he said, authorities “could go after them and take them to court and fine them, or imprison their principals in Hong Kong”.

Facebook, Google, and Twitter have suspended processing government requests for user data in Hong Kong, they said on Monday, following China’s imposition of the new national security law on the semi-autonomous city.

Facebook, which started operating in Hong Kong in 2010, this past year opened a huge new office in the town.

It sells more than $5 billion (roughly Rs. 37,510 crores) a year worth of ad space to Chinese companies and government agencies seeking to promote messages abroad, Reuters reported in January. That makes China Facebook’s biggest country for revenue following the United States.

The US internet firms are no strangers to governments demands regarding content and user information, and generally say they are bound by local laws.

The companies have often used a technique called “geo-blocking” to restrict content in a specific country without removing it altogether.

But the sweeping language of Hong Kong’s new law could mean such measures won’t be enough. Authorities won’t need to get court orders before requesting assistance or information, analysts said.

Requests for data about overseas users would put the companies in a especially tough spot.

“It’s a global law … if they comply with national security law in Hong Kong then there is the problem that they may violate laws in other countries,” said Francis Fong Po-kiu, honorary president of Hong Kong’s Information Technology Federation.

Content question

While the US social media services are blocked in mainland China, they will have operated freely in Hong Kong.

Other US Internet platforms may also be rich with content that’s banned in mainland China and may now be judged illegal in Hong Kong.

US video streaming site Netflix, for example, carries Joshua: Teenager vs. Superpower, a 2017 documentary on activist Joshua Wong whose books were taken off Hong Kong public libraries last week.

Ten Years, a 2015 film that has been criticised by Chinese state media for portraying a dystopian future Hong Kong under Chinese Communist Party get a handle on, is also on its platform.

Netflix declined to comment.

Google’s YouTube is a popular platform for critics of Beijing. New York-based fugitive tycoon Guo Wengui has regularly voiced support for Hong Kong protesters in his videos. Google didn’t immediately answer a request comment.

None of these organizations has yet said how they will handle requests from Hong Kong to block or remove content, and the risk to be caught in political crossfire looms large.

“The foreign content players have to rethink what they display in Hong Kong,” said Duncan Clark, chairman at consultancy BDA China.

“The downside is very big if they get US senators on their backs for accommodating. Any move they make will be heavily scrutinised.”

© Thomson Reuters 2020