The high-tech cold war that has entangled RIM

When Research In Motion signed a deal four years ago to sell BlackBerry handsets in the United Arab Emirates, executives touted it as a “significant opportunity in one of the world’s fastest growing economic centres.” To human rights activists across the Gulf  region, the BlackBerry’s arrival brought something else—a new way to evade regimes intent on stifling dissent. “Since the BlackBerry arrived, activists and human rights defenders have depended heavily on it to spread their activities and the culture of human rights,” says Nabeel Rajab of the Bahrain Centre for Human Rights. “We’ve been able to reach people we never could in the past.”

Now with governments across the Middle East and Southeast Asia threatening to ban the BlackBerry unless RIM gives them access to users’ encrypted private messages, the Waterloo, Ont., company has unwittingly found itself thrust into a new role: freedom fighter.

As technology advances, something akin to an information cold war is rapidly emerging. On the one side, Western leaders and rights activists are keen to use new technology to spread democracy and free expression, while on the other foreign powers are desperate to tighten their grip on the Internet and communications. And as the two sides face off, skirmishes like the one that’s embroiled RIM have come to resemble the types of proxy battles fought by third parties during the Cold War. But despite the high-profile nature of these fights and how eagerly they’ve been taken up by democracy advocates, it’s not clear most tech companies are all that eager to play the part of activists.

Over the past two years governments around the world have pressed RIM to grant them access to user emails and instant messages that travel over the BlackBerry network, citing security concerns. But the situation broke wide open this month when the Emirates, Saudi Arabia and India threatened to block BlackBerry services. Other countries have hinted they may do the same. These governments have demanded “backdoor” access to the BlackBerry network, something they claim the company has granted elsewhere in the world.

RIM has remained tight-lipped throughout the ordeal. In its few public comments RIM insists it does not give special treatment to any country. And even if it wanted to let governments eavesdrop on the encrypted data that travels across the servers it sets up for its corporate clients, RIM says even it can’t read what those users transmit. In a brief statement, RIM said “it genuinely tries to be as co-operative as possible with governments in the spirit of supporting legal and national security requirements, while also preserving the lawful needs of citizens and corporations.” The only time it would grant access to users’ data, it said, is in situations involving national security as “governed by the country’s judicial oversight and rules of law.”

The showdown comes on the heels of other cases in which tech companies have found themselves grappling with lofty ideals like free expression. In January, Google challenged China over the censorship of its search engine, while Pakistan banned Facebook over “blasphemous” images that appeared on a user’s page. Security experts say we can expect more confrontations in the future as new devices and communications services become popular. For instance, India is now also setting its sights on Skype’s Internet phone service and Google’s instant messaging tool. It’s possible some countries will eventually object to apps designed for tablet computers like the Apple iPad. According to reports, Apple has already blocked some iPhone apps related to the Dalai Lama from appearing in its China app store.

As with the clash between Google and China—which ended last month when a compromise was reached and the company offered a link on its Chinese page to its Hong Kong search site, which is uncensored—the U.S. government has taken a keen interest in RIM’s troubles. “There is a legitimate security concern,” U.S. Secretary of State Hillary Clinton said, “but there’s also a legitimate right of free use and access.” U.S. State Department spokesman Philip Crowley took things further. “It’s not about a Canadian company,” he said. “It’s about what we think is an important element of democracy, human rights, and freedom of information and the flow of information in the 21st century.”

U.S. legislators have shown they’re also willing to play hardball. In March, assistant Senate majority leader Dick Durbin, a Democrat from Illinois, said he plans to introduce legislation that would force tech firms “to take reasonable steps to protect human rights or face civil or criminal liability.” He sent 30 letters to companies, including RIM, seeking information about their business practices in China. He also urged those companies to join the Global Network Initiative (GNI), an upstart coalition of tech companies, socially responsible investment firms and academics.

Launched at the end of 2008, the GNI requires companies to adhere to a set of principles that “respect and protect the freedom of expression and privacy rights of their users.” So far only Google, Microsoft and Yahoo! have joined. “Companies need to take steps to ensure they don’t become complicit in human rights violations in markets in which they work,” says Cynthia Wong, a staff attorney at the Center For Democracy and Technology in Washington, a founding member of the GNI. “It’s a new concept to the tech industry, but frankly companies in other sectors have been dealing with human rights issues for a long time.”

There are clear parallels between how rights groups hope to guide tech companies and the way labour groups swayed the apparel industry in the 1990s to stop using sweatshops. Yet there are also vast differences. For one thing, the governments that are threatening to ban the BlackBerry justify their decision on national security grounds. In the case of India, the threat from tech-savvy terrorists was painfully clear during the 2008 attack on Mumbai. In that assault, it’s believed the gunmen relied on BlackBerries and other phones, along with social media sites, to stay in constant contact with those in Pakistan coordinating the massacre. India says that unless RIM comes up with a technical solution by Aug. 31 that gives it access to user emails and instant messages, it will order some BlackBerry services shut down.

At the same time, though, the claim by the Gulf states of Saudi Arabia and the Emirates that this is a national security issue has raised hackles from activists. They point to an incident earlier this month when police in the Emirates arrested several BlackBerry users who were planning a protest against rising gasoline prices. “Nobody buys the story this is about fighting terrorism,” says Rajab. “The ruling families and tribes fear activism is threatening the authority of their regimes.”

Ultimately, the battle taking shape is for control of information. New technologies are taking it away from state-controlled television and radio stations and putting it in the hands of people.

But as politicians and activists urge tech companies to step up and take a more proactive stance in their relations with foreign governments, RIM’s experience shows how high the stakes can be. As competition from iPhones and other smartphones erodes its North American market share, the company has come to rely heavily on the Middle East and Asia for business. In Saudi Arabia and the Emirates alone, there are 1.2 million BlackBerry users. At the height of the conflict during the first week of August, RIM shed $3.8 billion in value as investors fled the stock, though it has since rebounded somewhat.

Harder to measure is the long-term impact this episode will have on RIM’s reputation with customers, which serves as a warning to other tech companies that find themselves in a similar situation in the future. The company is under constant scrutiny as to whether it has signed special deals with governments. The Financial Times, for instance, reported that RIM only won access to China and Russia by agreeing to let security agencies monitor traffic. When Saudi Arabia announced it had reached an agreement with RIM, critics slammed it for caving to censors. Activists like Rajab in Bahrain are watching events closely. “We’re worried they’re going to give up.”

Certainly not everyone is enthralled with the idea that tech companies are being compelled to take an activist bent. Rob Enderle, a technology analyst in California, says there are serious risks that come when large companies take on the role of nation-building and fermenting dissent. “I’m not sure companies should be doing this,” he says. “Certainly individuals in companies can, but I’m not convinced that it’s the purview of a chief executive officer, whose purpose is to drive revenue and profitability to the firm and benefit all stockholders, to be out there trying to drive political change.”

For now, as the information cold war heats up, RIM and other companies hope to stay on neutral ground. But as governments increasingly tighten their grip on the flow of news and information in their countries, it’s a sure bet many more skirmishes are going to flare up around the world. Sooner or later, RIM and others will have to declare which side they’re on.