Western companies can no longer deal with dictators (analysis)

New York (CNN Business) – The war in Ukraine a Mass outflow of companies Russia has never seen that. The corporations that had carved their way into the growing consumer market for many years retreated almost overnight, and their lucrative operations suddenly seemed like liabilities.

The eviction calls into question what some of those companies were originally doing in Russia and why it took a war move to change their minds. One of the targeted companies is Nokia.

Monday, daily The New York Times revealed How Nokia has for years provided equipment and services in support of Russia’s broad surveillance system, which has been used to spy on protesters. Although Nokia condemned the invasion of Ukraine and said it would suspend sales in the country, the company told The New York Times that it needed to develop products that were compliant with the monitoring system.

In other words, it is the cost of doing business in Russia.

Nokia said In a statement that The New York Times article misleads, the company insists the surveillance equipment is “not manufactured, installed or serviced.” “We condemn the misuse of legal interventions for the purpose of violating human rights,” he said. “To avoid this, multilateral action is essential to ensure the establishment of adequate structures.”

Against the laws. Ethics

There is no evidence that Nokia did anything illegal, but the rules and the law are not the same.

It’s hard to imagine Nokia not knowing what’s going on in Russia. Speaking to The New York Times, a Russian intelligence expert said that Nokia “needs to know how its devices are used.”

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Experts say there is no company (or consumer) that can keep their hands clean. The vast and interconnected nature of global supply chains makes it almost impossible to avoid any direct or indirect links with corruption, labor exploitation or other undesirable elements of global trade.

If so, the question is how close you are to bad behavior, says Jason Brennan, a professor of business ethics at Georgetown University.

“No one is ready to swim when there is a corpse in the pool, but in the sea … it’s about the concentration of death around you,” he says. “Markets work this way too.”

That is, Nokia may not have developed the technology to spy on Russians, but it did teach Russian officials how to operate it, and it should have been a big red flag for the company’s top executives.

Documents reviewed by The New York Times show that the company knew how to facilitate Russian surveillance. The newspaper reports that this was an essential and lucrative business for Nokia, with hundreds of millions of dollars in annual revenue.

Nokia has called on governments to lay down clear rules on where technology can and cannot be sold. “Nokia has no ability to monitor, access or interfere with any legal interference capabilities on our customer-owned and operating networks,” he told the Associated Press.

The common claim of large corporations that have difficulty controlling their own activities is this: they ask governments to intervene to protect them from our vile stimuli. (See: Zuckerberg, Mark..)

Come to neutral

This dilemma is not new to multinational corporations. Big technology, in particular, struggles to find a balance between democratic policies such as free speech and privacy, and the realities of doing business in dictatorial markets such as China and Russia, which do not have those rights.

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For example, Apple has long been proud of ensuring the privacy of its customers. But in China, Apple had to bend those values ​​to comply with regulators.

A Review by the New York Times Last summer the Chinese version of the Apple App Store aided government censorship and put Chinese consumer data at risk. Apple denied some of the results of the report, saying it only removed the applications in accordance with Chinese law.

Similarly, chips are made Intel and Nvidia They are found in computers used by China to mass surveillance of Muslim minorities.

Last year, Microsoft said it would Deliberately withdrawn Images of repression on Tiananmen Square Around the world in its Bing search engine, China’s rigorous internal audit is a rare occurrence to extend beyond its borders.

Tech leaders like Apple CEO Tim Cook have argued that participating in dictatorial markets is better than staying out. But often it refers to complying with regimes responsible for human rights violations and sometimes assisting them in those goals.

Brennan, a professor of business ethics, argues that while local laws are needed, companies should not directly assist dictatorial government. “You can’t do it because you were ordered, you can’t do this for the money,” he said.

Sorry if I lost a lot more money. “You can not do bad for $ 200 billion. You can not do that for a million. It’s a matter of basic ethics,” Brennan added.

The good news is that companies like Nokia are looking for help to control themselves: doing the right thing is good business. This is good not only for public relations but also for profit.

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Consumers and investors are increasingly aware of the behavior of their companies, and they have taken note. Notice how quickly Disney He then reversed his response and actions Initially denied To oppose the so-called law “Don’t say homosexuality” in Florida. The pace of exit from Russia among Western brands underscores the relatively new era in which investors and customers are demanding that brands do more than maximize profits at all costs.

So companies must do the right thing and often miss out on lucrative opportunities to help misguided enemy governments. If they succumb to their urges, their actions will have consequences: for companies and the world.

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