The case Yahoo versus Survivors of the Holocaust is based on a lawsuit that was made by a group of French Nazi concentration camp survivors against the website yahoo.com for the auction of Nazi materials and other hate related contents. The Holocaust survivors sued the company in a French court after the US based Yahoo Company refused to respond to the warnings block access to neo-Nazi contents on its US based servers. The case was targeted towards accusing CEO of Yahoo Timothy Koogle as responsible for the controversial auctioning of Nazi artifacts on the Yahoo website and if he is found guilty he faces potential incarceration in France. The case also provides information on the dot.com crash which had a negative impact on Yahoo’s performance which experienced serious decline alongside other companies in the advertising budget.
In April 2001, Yahoo suffered a 42% decline in advertising revenue which led to mass exodus of the company’s leading staff and threatened to replace Koogle. The case also point out that Yahoo France which was established in 1996 as a subsidiary of Yahoo International shares similar organizational structure, same look, and tailored its contents according to local tastes. It is therefore, a shared system whereby information that comes up on the company’s US site also shows up on the French site. Thus, there was a challenge in creating a global brand that is able to adapt to suit local tastes. In this case, the challenge of a shared website has led to a lawsuit which was put together in April 2000.
La Ligue Contre le Racisme et l’Antisemitisme (LICRA) and the French Jewish Students filed a lawsuit against the US based company Yahoo, for posting Nazi-era contents for sale on the company’s auction site. Yahoo responded to the lawsuit by countersuing LICRA with the US District court for violating of constitutional rights of free speech in the US. Analyze the opportunities and threats of Yahoo establishing subsidiaries in foreign countries which maintain majority ownership.
Yahoo International has developed subsidiaries that are suitable for the company image as a major MNC working in Information Technology (IT). The
company is establishing subsidiaries in foreign countries around the world so that they can maintain majority ownership. For instance, in Yahoo France, the contents are tailored to fit local culture through specific contents such as sports categories focused on Tour de France, world cup soccer and the French Decathlon; while in the UK these categories focused on rugby, cricket, and equestrian events. Yahoo subsidiaries also enjoy the opportunities of majority ownership which allows the MNC to benefit from IT advancement and ease of transportation which makes it easier for the home and host country to have an effective international business. An example of the expected experience of Yahoo subsidiaries right to maintain majority ownership is similar to MTV network International, the music channel operation that reaches 1 billion people in 18 different languages and 164 countries; MTV management assures host countries that they are not in the business of exporting American culture, they point out their policy of 70% local content (Fatehi, 2008). Like MTV Network International, Yahoo International is advance in that it has developed 24 international sites in 13 languages, in each of its international markets Yahoo built independent directories of local language websites and other contents.
The company yahoo is able to benefit this way by attracting 40% users from foreign countries. Nonetheless, the threats of having Yahoo in foreign subsidiaries which maintain majority ownership is that they risk having problems of hosting contents that are not culturally acceptable such as in the case of the Nazi artifacts showing up on the company’s French website and thereby signaling dispute due to local culture. The French representatives, primarily LICRA finds Yahoo as supporting unlawful act of hosting Nazi and other hateful contents which is against the Nazi Symbols Act. The symbols associated with Hitler’s Nazis are attractive to bigots on the Web because they suggest anti-Semitism in an immediate, forceful way to the general public (Poisoning the Web, n.d.).
Based on the conflict in thoughts between the US based company and their French subsidiary, there are risks that are involved in providing foreign subsidiaries or their communities’ with the authority to accuse the company’s actions. According to the claim of Yahoo their intentions appear innocent. Thus, Yahoo is able to take a stance to protect their Freedom of Speech so that they do not experience continued accusation associated with hateful contents. Yahoo calls for protection of the First Amendment of the US Constitution which includes the most basic component of freedom of expression, the right of freedom of speech, the right to freedom of speech allows individuals to express themselves without interference or constraint by the government (First Amendment, 2010). The information on the First Amendment of the US Constitution is important for Yahoo to use in defense of the risks that they could experience from their accusers who have consider them as disobeying the Anti-Nazi Act and French laws that prohibited the display of Nazi contents and other hateful material. Analyze Yahoo’s social responsibility from a stakeholder perspective
Yahoo’s social responsibility in this case will have a negative effect on the stakeholder perspective and their capacity for prosperity due to the conflict laid out in the lawsuits by Yahoo and LICRA. Yahoo is responsible for providing social responsibility to their customers, by providing safe products at reasonable costs. However, Yahoo was accused of showing auctions of Nazi contents on the company’s U.S.-based Website which was accessible by French users and thus Yahoo was condemned by French Holocaust survivors. Yahoo’s social responsibility is also negative due to its acts that are found by LICRA as disobeying local laws and customs.
Yahoo made progress in a countersuit against LICRA which accused that the French’s decision was in violation of the Communication, Decency Act, and Article 19 of the International Covenant on Civil and Political Rights, Article 10 of the convention for the Protection of Human Rights and Fundamental Freedoms, Article 19 of the Universal Declaration of Human Rights. Yahoo’s countersuits provide stakeholders with confidence in the organizations ability to overcome the constraints of the lawsuit. Yahoo’s stance in taking on a countersuit is a strong defense which creates opportunity to regain respect for the company and their stakeholders without acknowledging a prejudice intent or reference to Nazi auctions. Take a position on whether Yahoo acted in a manner that was ethically and socially responsible.
In the case Yahoo versus survivors of the holocaust who is particularly Jewish students, the company did not meet the high expectancy level of ethical and social responsible standards. This is due to the auction of materials that are intolerant. The web displays of Nazi contents and other hateful materials which were found on Yahoo website are unethical and unlawful. MNCs are responsible to act in a social responsible way; this includes operating within a certain parameter. There is thus a demand for the company to react quickly toward such contents of hate so that they will protect the company’s image and mission without experiencing accusation.
Neo-Nazis use the Web to market merchandise, selling items emblazoned with the instantly recognizable symbols of Hitler’s Nazi party… Like the T-shirt a music fan might buy at a rock concert, one shirt reads Adolf Hitler European Tour 1939 1945(Poisoning the Web, n.d.). Based on such negative intents, Yahoo is obliged to take serious future steps to isolate neo-Nazi contents from the website to protect the company’s image and promote social responsibility and ethics by condemning those that misuse the web to spread hate. Besides excluding Nazi-era memorabilia from the company’s French-language portal, formulate two additional business strategies to address the issues faced by Yahoo as well as the risks associated with implementing those strategies.
Besides excluding Nazi era memorabilia from the company’s French language portal, it is important that Yahoo applies additional business strategies to address the issues faced by the company. One strategy that could benefit the organization is the Strategic planning which is the alignment of organizational capabilities with anticipated environmental changes in the pursuit of goal attainment (Fatehi, 2008). This strategy is important because it will provide Yahoo with the understanding of their environment and the forces that are likely to determine how they secure resources and achieve goals. However, there is a downside to this strategy and it is the risks involved in planning strategy which is somehow limited to the extent of difficulties that can occur as Yahoo expands globally. The multiplicity of cultural, sociopolitical, legal, and economic environments creates quantitative and qualitative difficulties (Fatehi, 2008).
The problems that are likely to arise from Yahoo’s internationalization are risky and there is a chance that the firm will experience additional complexity that is outside of their strategic planning due to new problems can be a burden to the MNC. Cultural aspects of strategy are important strategies and will be the second business strategy that will address Yahoo’s problems in their foreign markets. This strategy is important because culture plays a vital role in controlling MNCs to better support them in achieving their goals (Fatehi, 2008). In most business situations individuals are expected to apply self control and abide by culture norms.
Cultural aspect of strategy is an important influence in determining the firm’s role in globalization and controlling its foreign operations. The risks of applying culture aspects of strategy is that the cultural difference are vast and vary in concept. Thus, there is a demand for Yahoo to meet cultural differences particularly by understanding the thoughts of foreign cultures. Without understanding the mentality and beliefs of a certain culture where they operate, Yahoo is likely to reencounter difficulties similar to the Nazi artifacts auction. Thus, the risk of cultural aspects of strategy will develop difficulties due to complications from various cultural differences which should be control in order to promote the company’s international objectives. Predict the consequences had Yahoo complied with LICRA’s initial demands.
There would have been limited consequences for Yahoo if they had complied with LICRA’s initial demands to remove Nazi contents from their website. Instead, Yahoo initially responded that they had complied with French law on this issue and that there website did have a display or auction of hateful contents or Nazi materials. The case was initially made by LICRA charging Yahoo with illegally hosting auctions of Nazism, thereafter, the French court gave Yahoo a warning to block French residents from viewing Nazi auction or face fines. Yahoo adhering to LICRA would have violated their constitutional rights to protect free speech in the US Constitution. Thus, Yahoo would risk having to address serious issues from their home country about freedom of press which is linked to freedom of speech in the US constitution.
The right to freedom of the press guaranteed by the first amendment is not very different from the right to freedom of speech; it allows an individual to express themselves through publication and dissemination; it is part of the constitutional protection of freedom of expression; and it does not afford members of the media any special rights or privileges not afforded to citizens in general (First Amendment, 2010). Yahoo faces the possibility of running into further problems from their users who could use the First Amendment as a bargain power to use the website without compromising their constitutional rights. It is however a limited consequence if Yahoo is able to respond early to users or law enforcers on the contents display on their websites, this will avoid expenses for lawsuits and avoid challenges in securing revenues for stakeholders.
1. Fatehi, K. (2008). Managing internationally: Succeeding in a culturally diverse world (1st ed.). Thousand Oaks, CA: Sage Publications Ltd.
2. First Amendment (2010) Cornell University’s Legal Information Institute. Retrieved 5/26/2012 from http://www.law.cornell.edu/wex/First_amendment
3. Poisoning the Web: Hatred Online (n.d.) Neo-Nazis: Stormtroopers of the Web. Retrieved 5/26/2012 from http://www.adl.org/poisoning_web/neo_nazi.asp