Internet giant, Google has threatened to exit from China, the world's biggest internet market, after a highly sophisticated and targeted cyber attack originating from China tried to break into the e-mail accounts of Chinese human rights activists.
Refusing to bow any further to the strict censorship laws under which it is compelled to operate in China, Google said it is ready to exit from the Chinese market, where it has made its biggest investments.
Commenators say that the ramifications of such a move will be difficult for other multinationals operating in China to ignore.
David Drummond, Google's chief legal officer of said in a blog post, that in mid-December, the company detected a highly sophisticated and targeted attack on its corporate infrastructure originating from China that resulted in the theft of its intellectual property.
Although, what appeared initially to be only a security incident, albeit a significant one, was something quite different as the company soon discovered that the accounts of dozens of Gmail users based in the US, China and Europe, who are advocates of human rights in China, appear to have been routinely accessed by third parties.
Drummond said that these accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users' computers.
According to Google's investigation, only two Gmail accounts appeared to have been accessed, and that was limited to account information, such as the date the account was created and subject line, rather than the content of emails themselves.
While its investigation, Google found at least 20 other large publicly listed companies from a wide range of businesses-including the internet, finance, technology, media and chemical sectors to have been the target of similar cyber attacks.
Drummond said that it is currently in the process of notifying those companies, and also working with the relevant US authorities. Reports say, the US intelligence agencies, including the US National Security Agency have been informed.
Drummond said, ''We have taken the unusual step of sharing information about these attacks with a broad audience not just because of the security and human rights implications of what we have unearthed, but also because this information goes to the heart of a much bigger global debate about freedom of speech.
''These attacks and the surveillance they have uncovered - combined with the attempts over the past year to further limit free speech on the web - have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China,'' he added.
The US government has taken the issue seriously and the US secretary of State Hillary Clinton met with representatives from Google, Microsoft and Cisco Systems to find out ways to deter some countries from blocking access to information.
Cisco, the internet network infrastructure giant has made huge investments in China, building most of the country's internet infrastructure, while Microsoft has invested millions apart from selling its main revenue generating Windows operating system in nearly all the 40 million computers that were sold in China last year.
Google's uneasy China operations
When Google, a late entrant in China, launched the google.cn search engine in 2006, it was forced to comply with China's strict censorship laws and agreed to censor some of its searches.
Drummond said that Google complied in the belief that the benefits of increased access to information for people in China and a more open internet outweighed its discomfort in agreeing to censor some results.
But, Google said at that time, that it would carefully monitor conditions in China, including new laws and other restrictions on its services, and if it determined that it was unable to achieve the objective of increased access to information, it would not hesitate to reconsider its approach to China.
Google's entry into China had been criticised by a number of human rights groups, who had said that the internet giant had compromised on human rights by agreeing to be censored.
The Chinese government had blocked Google's search engine and its video-sharing site, YouTube, on a number of occasions and relations between the company and Beijing heated up last year, when China accused Google of allowing pornographic sites to be accessed on its search engine.
Fed up with China's bullying tactics, Google's China chief, Kaifu Lee resigned in September 2009 after being unable to cope with the Chinese government censors.
Google had placated Beijing by removing some links from its China's search engine, but yesterday, the company decided to draw the line, saying that it is no longer willing to continue censoring its results, even if it means ceasing all operations and shutting its offices in China.
Other internet companies like Yahoo and eBay had also deal with censorship in China and to avoid running battles with the government, merged their businesses with local firms in exchange for equity stakes.
Although China, which has the largest number of internet users at 338 million as of June 2009, of which Google has an approximately 31 per cent of the internet search market share, though behind market leader Baidu's 61 per cent, the country accounts for a mere $200 million of Google's global revenue of $22 billion.
Past cyber attacks from China
A commentator said that even though Google had not blamed the Chinese government directly for hacking into the emails of human rights activists, it is abundantly clear that it was a government sponsored attack
In the past, Canada, Germany, the UK, the US, France, Spain, the diasporas from Tibet and even its close commercial ally, Australia, have accused China of conducting cyber attacks and internet hacking.
China has time and again denied the charges despite the massive evidence of these attacks originating from mainland China on all these countries.
In April 2009, a spy ring, widely dubbed GhostNet, reported to be based in China had hacked into the $300-billion joint strike fighter programme of the US forces and the British Royal Navy, is aimed at homogenising the air defence needs of the two armed forces. (See: GhostNet hacks into US-UK fighter project).
Thousands of confidential files on the 'F-35' multi-purpose fighter jet had been copied and The Wall Street Journal had reported, ''Investigators traced the penetrations back with a "high level of certainty" to known Chinese Internet protocol addresses and digital fingerprints ''that had been used for attacks in the past''.
In March last year, the Pentagon admitted that in 2007, the defence networks in the US as well as computer networks of Germany, the UK and France were hit by multiple intrusions, with most of the intrusions originating from China.
In December 2007, British intelligence agency MI5 had warned Rolls-Royce, Royal Dutch Shell and around 300 banks in the UK of high level covert cyber attacks originating from China.
However, the warning had come too late for Rolls-Royce and Royal Dutch Shell, which discovered that Chinese hackers had already infected Rolls-Royce's network with a Trojan that sent information back to a remote server; while Shell discovered a Chinese spy ring in Houston that was trying to gain access to confidential information on pricing of the company's operations in Africa.
In March 2009, investigators from Information Warfare Monitor (IWM) in Ottawa, Canada said that while investigating a Chinese cyber attack against the Tibetan exile community and the computers used by the Dalai Lama, stumbled on an online spy network originating from China that had hacked into classified documents on government and private computers in 103 countries.
GhostNet had hacked the computers used by the Dalai Lama and Tibetan exiles as well as 1,295 computers belonging to NATO, foreign ministries, embassies, banks and news organisations across the world. IVM said that the GhostNet removed documents without the target's knowledge, while key-strokes were logged, web cameras were silently triggered and audio inputs activated.
In April 2009, Chinese spies had hacked into the mobile phones, computers and e-mail of Australian prime minister Kevin Rudd and officials accompanying him during a visit to Beijing. The blatant electronic espionage has prompted Australian intelligence officials to tighten the communications security for senior government officials travelling to China.
Intelligence officials in Australia also believe that the Chinese government had targeted the mining company Rio Tinto, which had been under cyber attack in the early stages of Chinese government-owned Chinalco's bid for the Anglo-Australian miner.
It is well known in the global intelligence community that Hainan islands, situated in the southernmost part of China, is the home to the Lingshui signals intelligence facility and the third technical department of the People's Liberation Army and also believed to house a secret underground nuclear submarine base that has been constructed by digging through the mountain overlooking the bay.
However, global intelligence agencies find it very difficult to distinguish between state-sponsored hackers and individual hackers. Since the US is the most computerised country in the world, it is more prone to cyber warfare and cyber terrorism.