HONG KONG PRIVACY COMMISSION TO INVESTIGATE

C O N F I D E N T I A L SECTION 01 OF 02 HONG KONG 001941

SIPDIS

SIPDIS

DEPT FOR EAP AND EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 05/10/2031
TAGS: PGOV PHUM PINR PREL HK CH
SUBJECT: HONG KONG PRIVACY COMMISSION TO INVESTIGATE
YAHOO!'S ROLE IN DETENTION OF CHINESE DISSIDENT

REF: 05 HONG KONG 4265

Classified By: E/P Chief Simon Schuchat. Reasons: 1.4(b,d).


1. (C) Summary: On May 2, Hong Kong's Privacy Commissioner
confirmed to poloff that the Commission was investigating
whether information provided by Yahoo! regarding mainland
journalist Shi Tao, had violated the territory's Personal
Data (Privacy) Ordinance. Although Shi is not a Hong Kong
resident, the International Chinese Pen Center, an
organization of exiled mainland writers, has filed a
complaint with the privacy watchdog on Shi's behalf. Of
particular concern to lawmakers and human rights activists
was speculation that Yahoo!'s Hong Kong-based operations had
provided information to PRC law enforcement officials -- a
clear violation of Hong Kong's status as an autonomous
territory with a separate legal structure. In response,
representatives of Yahoo! have emphasized that Yahoo! China,
not Yahoo! Hong Kong, responded to the request from mainland
law enforcement in Shi's case. However, it is unclear what
role Yahoo! Holdings (Hong Kong) Limited, the holding company
which previously owned both Yahoo! China and Yahoo! Hong Kong
at the time of Shi's arrest, played in passing, authorizing,
or directing the transfer of data to PRC authorities; it may
therefore be the current focus of the Privacy Commission's
investigation. End Summary.

Commission Investigates Yahoo!
--------------


2. (C) On May 2, Hong Kong's Privacy Commissioner for
Personal Data Roderick Woo confirmed to poloff that the
Commission was investigating whether information provided by
Yahoo! regarding mainland journalist Shi Tao, had violated
the territory's Personal Data (Privacy) Ordinance. According
to Shi's mainland court verdict, Yahoo! Holdings (Hong Kong)
Limited provided information to China's state security
authorities which later led to Shi's arrest and conviction.
Although Shi is not a Hong Kong resident, Zhang Yu, Secretary
General of the International Chinese Pen Center, an
organization of exiled mainland writers, filed a complaint
with the Privacy Commission -- a statutory body separate from
the Hong Kong Government and charged with protecting the
privacy of personal data -- on Shi's behalf. During the
meeting, Woo was not forthcoming about the details of the
case, citing the sensitive nature of the ongoing
investigation.


3. (C) In his initial response to the media storm regarding
Yahoo!'s role in Shi Tao's imprisonment last September,
Yahoo! co-founder Jerry Yang did not deny that his company
had provided information to mainland authorities; he instead
emphasized that the company had no choice but to obey the
national laws in the countries in which it operated.
According to press reports, a total of four mainland internet
writers have been imprisoned (Shi Tao, 10 years; Li Zhi, 8
years; Jiang Lijun, 4 year; and Wang Xiaoning, 10 years)
after Yahoo! Holdings (Hong Kong) Limited turned over
information regarding their yahoo.cn email accounts.

Yahoo! Denies Violating Hong Kong Autonomy
--------------


4. (C) Of particular concern to Hong Kong lawmakers and human
rights activists was the possibility that the Yahoo!
operations based in Hong Kong had provided information to PRC
investigators, a clear violation of Hong Kong's status as an
autonomous territory with a separate legal structure. In two
separate instances, representatives of Yahoo! vigorously
denied that Yahoo! Hong Kong had provided information on Shi
Tao to mainland authorities. In October 2005, Hong Kong's
legislature convened a special Panel meeting to ascertain
whether the territory's privacy laws had been violated.
Allan Kwan, Managing Director of Yahoo! Holdings (Hong Kong)
Limited stated in an October 28, 2005 letter to Legco that
"Yahoo! Hong Kong has not been involved in any disclosure of
information, including that relating to Shi Tao, to the
mainland authorities...Since compliance with law enforcement
mandates in mainland China are handled by Yahoo! China,
Yahoo! Hong Kong is not aware of what information was
provided in that case or the circumstances thereof. Our
understanding of this matter is that the data disclosure was
made by the Yahoo! China operation for a PRC user in China
holding a .cn email account. Neither Yahoo! Hong Kong nor
any .hk user data was involved, and as such we do not believe
that there are any implications with respect to the Personal
Data (Privacy) Ordinance." Furthermore, on February 15,
during testimony before the U.S. House Committee on

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International Relations on the issue of the Internet in
China, Michael Callahan, Senior Vice President and General
Counsel for Yahoo! Inc. again stated that Yahoo! Hong Kong
"was not involved in any disclosure of information about Mr.
Shi to the Chinese Government."

Privacy Violation?
--------------


5. (C) At issue is the role of three separate entities
potentially involved in the case of Shi Tao: Yahoo! China,
Yahoo! Hong Kong, and Yahoo! Holdings (Hong Kong) Limited,
the holding company which previously owned the former two
companies. Since August of last year, Yahoo! China has been
owned and controlled by Alibaba.com Corporation, a Chinese
technology firm. It is clear that Yahoo! China responded to
a request from mainland law enforcement authorities regarding
Shi and that Yahoo! Hong Kong played no role in this transfer
of user information. However, what is unclear is the role of
the holding company, Yahoo! Holdings (Hong Kong) Limited in
passing, authorizing, or directing the transfer of data to
PRC authorities and may be the focus of the Privacy
Commission's investigation. Woo confirmed that if the
complainant (in this case, the International Chinese Pen
Center) has legal standing to lodge a complaint, then the
Commission would be obligated to investigate the case. If
Yahoo! -- whether it is Yahoo! Hong Kong, or Yahoo! Holdings
(Hong Kong) Limited is found to have violated Shi Tao's
privacy, then the Privacy Commissioner may serve an
enforcement notice on the company which may carry a penalty
of a fine and/or imprisonment.


6. (C) The Privacy Commissioner told the "South China Morning
Post" on April 26 that Shi's case was challenging because,
"there are difficulties with the technical definition of the
term 'personal data' and (issues) involving jurisdictional
points." Moreover, the Ordinance also provides for
exemptions to the privacy law "where their application is
likely to prejudice certain competing public or social
interests, such as security, defense and international
relations; prevention or detection of crime;" etc. For
example, on May 10, the Court of First Instance issued a
court order requiring four Internet service providers to
provide the identities of 49 users who allegedly downloaded
local films illegally. In this case, the Hong Kong Court
found that the users' privacy was exempt from the Privacy
Ordinance in order to detect criminal activity.
Cunningham