Google scored some ethics and credibility points by pulling out of China, but at some point, this has to be a concern. India, for all its huffing an puffing about security is probably trying to protect its own nascent search industry - and the fat jobs it offers - just like China did.
India is unlikely to be shamed into withdrawing its demands but may be more willing to negotiate than was China. Circumvention of Indian regulation will probably also be easier than it was in China and the penalties for getting caught will be less severe. The larger strategic question for Google is how to continue to grow in these developing markets where the playing field is decidedly lopsided in favor of the home team. That fix is a huge priority; continued negotiations with host governments is a drain on resources and time to market.
Amol Sharma reports in the Wall Street Journal:
"Google Inc. told Indian regulators in a confidential memo that tough proposed restrictions on Internet content could hamper the company and others in a promising market by exposing them to liability for a broad swath of material published by third parties.
The regulations were enacted last month with little change from the proposal. Google's concerns, laid out in a February memo reviewed by The Wall Street Journal, added to criticism from civil-rights advocates who said the rules amounted to a crackdown on free speech on the Web.
Among other things, the rules require websites to remove objectionable content, including anything "grossly harmful" or "harassing." They require Internet-service providers and social-networking sites to bar certain types of content under terms-of-service agreements with users.
A spokesman for India's Ministry of Communications and Information Technology said the agency conducted a thorough review of public comments on the draft rules. The ministry will issue a "clarification" soon to address concerns free-speech advocates have raised in recent weeks, he said
Google's memo said regulations on Internet companies "play a crucial role in determining how free a medium of communication the Internet will be for the world's peoples, especially the millions of Indians who are increasingly making use of it in their everyday lives."
A Google spokeswoman declined to comment on the new rules. Internet companies see India as a potentially massive market. Industry groups say India already is one of the world's top Internet markets, with a user base of between 80 million to 100 million people. Investment bank Caris & Co. predicted that India will have 180 million to 200 million Internet users by 2015.
Google's under-the-radar lobbying effort in India was in a sharp contrast to the high-profile approach the Mountain View, Calif., company took in China last year when the company protested censorship of its search service. Google responded by redirecting Chinese users to an uncensored version of its search engine in Hong Kong.
India doesn't have the same kind of outright censorship or widespread bans as in China. But Google and others already face demands from Indian police and other authorities to remove content deemed offensive, such as material that disparages leading politicians or religious figures.
A person familiar with the company's thinking said Google was unhappy that the final Indian rules didn't address its concerns but believes the new framework is an improvement from the existing system, in which the company receives takedown requests with no guidelines on what is considered out of bounds. Google plans to remain in India and continue attempting to influence Internet rules and how they are enforced, the person said.
Apar Gupta, a New Delhi attorney and cyberlaw expert who submitted a complaint about the draft rules, said the government made only "cursory changes" based on input from outside parties. "This wasn't an open, consultative process. The changes between the finalized version and the initial draft weren't explained," and the final rules were published on a government website with no announcement, he said.
Google's search service was India's most popular website in March, with 56.3 million visitors, according to research firm ViziSense. Google's Orkut social-networking site had about 14 million visitors, making it India's sixth most-popular site. Facebook Inc.'s service was the third most-visited site, with 35.2 million users. A Facebook India spokeswoman declined to comment.
Internet companies haven't made public statements about the regulations, though some also submitted confidential comments at the draft stage. The communications ministry spokesman said the government would keep correspondence with companies confidential but that companies were free to offer public feedback.
The rules ban material that is "grossly harmful, harassing, blasphemous," as well as anything "ethnically objectionable" or "disparaging" or that "impersonate[s] another person."
Google had said such language was "too prescriptive" and bars material that might not be illegal under Indian law. The company instead wanted to replace the provisions with a ban on content that "violates any law for the time being in force."
Google also said it was "troubled" by a provision that said an Internet company "shall not itself host or publish or edit or store" banned content. Google said such wording could expose the company to liability for material posted by third parties, potentially causing the company "great harm." Lawyers said liability could vary widely, including possible imprisonment or fines, depending on whether an underlying law had been violated.
Regulators left in the provision with minor changes. The company also sought removal of a provision that said an Internet company must remove objectionable content after "obtaining actual knowledge by itself" of the material or after notification by authorities. Google wanted to relieve companies of the responsibility to decide what is illegal, and instead rely on a written notice from "a court of law or other legally empowered public authority."
The final rules made only a minor change to that provision.
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