Ebay-Skype plays 'Plausible Deniability' when it comes to Privacy

A report, Breaching Trust: An analysis of surveillance and security practices on China’s TOM-Skype platform, is causing quite a stir. TOM-Skype is a joint venture between China-based TOM Group and Ebay. The report's findings show a sophisticated monitoring system that scans and stores private chat messages for conversations and keywords deemed a threat to government of China. How the information is used remains to be seen. If the Yahoo case is any guide, it is not out of the question that TOM-Skype users may have been arrested, tortured, and incarcerated for discussing topics such as democracy, Falun Gong, or Tibet.

Ebay spokesperson, Jennifer Caukin, told the New York Times, “The security and privacy of our users is very important to Skype.” But the company spoke to the accessibility of the messages, not their monitoring. “The security breach does not affect Skype’s core technology or functionality,” she said. “It exists within an administrative layer on Tom Online servers. We have expressed our concern to Tom Online about the security issue and they have informed us that a fix to the problem will be completed within 24 hours.”

This shift of responsibility has increasingly been the strategy of our high-tech firms. Yahoo was the first to do it. After Yahoo was caught revealing personally identifiable information on their users to Chinese authorities, which led to the arrest of a number of democracy activists and journalists, Yahoo sold its China operations to Alibaba in return for a minority stake (40%) in Alibaba and a Board seat. When Yahoo executives were called before the House Committee on Foreign Relations for a second time last year, Jerry Yang, CEO of Yahoo, stated: "we are now a minority shareholder and do not control Alibaba or Yahoo! China’s day-to-day operations." The Committee was not impressed. Christopher Smith (R-NJ) responded,

"Alibaba's stock is sizzling. It has gone up three times its asking price, or something of that order. Great amounts of money are being made. As you said, Mr. Yang, 40 percent of ownership is still vested in Yahoo!, if I heard you correctly, 39 to 40 percent, whatever it might be—a major, although minority, major shareholder. I said at the time, 2 years ago, almost 2 years ago, that it does give you a plausible deniability to say, ‘‘Oh, our affiliate is doing it, but not us.’’ You still are major shareholders...So, Alibaba is not a dodge. It has plausible deniability; it has surface appeal. But it seems to me that there is still—if you really care about the victims, really care, if it was your wife or your husband or your child, would the model then fit? ‘‘Oh, it is Alibaba,’’ or ‘‘We are just complying with a lawful request.’’

There is a corollary here. Tom Group's profits are up 55% this quarter. Ebay is the minority shareholder in the joint venture. And Ebay is placing the blame for monitoring and storing private information on Tom Group. Plausible deniability?

As I have said before, our high-tech firms and our Congress need to do better than that. It is not a shock that emails, Internet searches and chats are monitored in China, and that the information is used to control dissent. Congress has yet to vote on the Global Online Freedom Act, which would essentially allow US companies operating in China to deny requests for personal information being used to squash dissent, and that the Multi-Stakeholder Initiative, set to release a voluntary code of conduct, has never materialised despite the promises of the CEO's of Google, Yahoo, and Microsoft that the code would be released imminently.

Let's hope the news today of the Tom-Skype controversy is the icing on the cake that forces the parties to come to a solution. Plausible deniability is not an option.