The Exit Option

June 13, 2022
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This essay is part of The Four Domains of Global Platform Governance, an essay series that examines platform governance from four distinct policy angles: content, data, competition and infrastructure.

Imagine you are a senior member of a global corporation that operates in a country halfway around the world. You receive orders from that country’s government to block “illegal” news about a public demonstration critical of state policy on your corporation’s social media platform. You have offices, assets and projected profits to think about. You also have staff within the country, as legally required by the government, and are concerned about their personal safety. What should you do?

This question surfaced in the context of China more than a decade ago: What should an American tech company do if another sovereign nation requires it to act in ways that risk peoples’ lives or their right to self-determination? This is a question that continues to haunt us. One answer, the exit option, has faded from public debates based on questionable assumptions. The exit option is the proposition that American social media companies should exit the market instead of abetting or contributing to certain kinds of harm. Following the China debates, the presence of American social media platforms in a country is seen as the more rights-friendly outcome. This piece is provocation to reach beyond the widespread acceptance of this idea. I argue that the exit option should be reintroduced as a choice, an obligation even, for companies when it appears that they will contribute materially to large-scale harm through their presence in a country.

In 2006, American technology companies had to explain their decision to comply with Chinese censorship laws to the US Congress. In 2021, they continued to be criticized for acts such as taking down a Russian vote consolidation app and obscuring criticism of democratic leadership for its handling of the COVID-19 pandemic. Despite the debates and attempts to mitigate harm, companies’ compliance with blocking orders is becoming the new normal. Below, I discuss the reasons offered in favour of compliance, highlighting how each of these reasons offers an insufficient explanation for the companies’ choices. For this, I draw upon Gary Elijah Dann and Neil Haddow’s (2008) narrative of the reasons provided by Google, Microsoft and Yahoo to the US Congress in 2006, which continues to be relevant and animates the companies’ present-day choices. While Dann and Haddow offer a valuable critique of each of these reasons, and do point toward the exit option, I am writing this essay over a decade later with the goal of arguing that the exit option should be among the choices seriously considered by technology companies.

During the congressional hearing about the US companies’ choices in China, the following reasons emerged for why the companies might feel the need to cooperate with Chinese censorship and surveillance:

  • To protect their business interests, companies want access to lucrative markets and to stay competitive globally.
  • The presence of foreign companies means more freedom since they will be transparent, and their practices will pressure local companies to do more toward protecting human rights than they might otherwise do.
  • Political content represents a fraction of what users seek, and if the population really wants information, they will manage to find it.
  • Companies are obligated to follow the laws of the countries in which they operate.
  • Refusal to comply endangers local employees, who might be prosecuted and imprisoned.

These reasons can be grouped into reasons related to business interests, reasons arguing that the companies have no choice and altruistic reasons. Let us start with the altruistic reasons. The first of these assumes that the presence of foreign companies and transparency will lead to “more freedom” than if the companies were to leave. It is difficult to measure this assumption or to predict what the outcome might be in each instance. Perhaps an American company’s departure has the potential to enrage a local population into mobilizing or irk the rich and powerful who can influence the state. The concern for staff is fair but privileges the staff’s welfare over the rest of the population’s rights. The better way to avoid putting the rights of the few in conflict with the rights of the many would be to resist hiring local staff in countries where they might be endangered. Even if this approach means that it costs a sizeable number of peoples’ jobs, it remains difficult to justify the violation of the larger population’s rights for this reason.

It is a strange world we live in if it is morally acceptable to suggest that business interests prevail over the imperative not to harm.

The reasons arguing that companies have no choice but to follow local laws are incomplete: in their entirety, they are effectively saying that companies must follow local laws if they wish to do business in the country in question, which means that they are really reasons pertaining to business interests. This brings us to a discussion of how strong an argument business interests can offer. It is a strange world we live in if it is morally acceptable to suggest that business interests prevail over the imperative not to harm. By morality, I refer to the universal moral principle that one should do no harm, which is a part of Western and Eastern philosophy, and is arguably embedded in international law. This principle does not come with exceptions: it does not say that one may do harm if one’s neighbour is also doing harm, or if one will suffer a financial loss if one desists from harmful activity.

A company’s exit from a market does not violate that country’s laws or contribute to harm of the population or of its own employees. It is unheard of, not to mention very difficult to prove, for anyone to be able to argue that they should be permitted to engage in harm because they are likely to engage in it more humanely than whomever might replace them. Apart from the fact that exit is the only moral choice for companies in certain circumstances, it is also important to consider the long-term damage that these companies’ contribution to censorship, propaganda and hate speech does to global politics. Now and then, we are reminded forcefully that the world is more closely connected than we realize, and desperate people take drastic action. The stability of other countries is desirable not only for the sake of their people, but also in the interests of all the countries that might be affected in various ways when instability turns outward.

Every conversation about a Western company enabling the violation of human rights in another country must be accompanied by a discussion of the exit option. I am not suggesting that each censorship or surveillance order should trigger an exit, but that there should be a clear threshold beyond which these companies will prioritize human interests over their business interests. In short, we need a clear norm for when the exit option should be triggered.

Works Cited

Dann, Gary Elijah and Neil Haddow. 2008. “Just Doing Business or Doing Just Business: Google, Microsoft, Yahoo! and the Business of Censoring China’s Internet.” Journal of Business Ethics 79: 219–34.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.

About the Author

Chinmayi Arun is a resident fellow of the Information Society Project at Yale Law School.

The Four Domains of Global Platform Governance

In the span of 15 years, the online public sphere has been largely privatized and is now dominated by a small number of platform companies. This has allowed the interests of publicly traded companies to determine the quality of our civic discourse, the character of our digital economy and, ultimately, the integrity of our democracies. This essay series brings together a global group of scholars working in four distinct domains of the platform governance policy discourse: content, data, competition and infrastructure.