For the past year, China has been a minefield for American Internet firms. They just can't seem to get a break. eBay has retreated, and a deal to go into business with Tom.com seems to be fraying. Google just got through its IME mini-scandal, and it still lags behind Baidu.

Most famously, Yahoo, Google, Microsoft and Cisco were all called before a US congressional hearing to answer charges that they are complicit in Chinese censorship and the jailing of Chinese dissidents. That latter issue has arisen again to cause more trouble for Yahoo, who have just been sued by the family of one such imprisoned dissident.

The New York Times reports:

A Chinese political prisoner and his wife sued Yahoo in federal court Wednesday, accusing the company of abetting the commission of torture by helping Chinese authorities identify political dissidents who were later beaten and imprisoned.

The suit, filed under the Alien Tort Claims Act and the Torture Victims Protection Act, is believed to be the first of its kind against an Internet company for its activities in China.

Wang Xiaoning, who according to the suit is serving a 10-year prison sentence in China; his wife, Yu Ling; and other unnamed defendants seek damages and an injunction barring Yahoo from identifying dissidents to Chinese authorities.

The Alien Tort Claims Act is an old peculiarity of American law that permits foreigners to sue foreign parties in American courts for violations of international law. It's been used recently as a tool to punish corporations for wrongdoing, real or perceived.

Yahoo's itself denies that its Hong Kong subsidiary played any role in Wang's imprisonment, saying that its Hong Kong operation does not supply information to the Mainland authorities or Yahoo China, which is now owned and operated by Chinese e-commerce firm Alibaba.com. Given increasing Chinese influence in Hong Kong, I am not sure how much that statement should reassure dissidents using Yahoo Hong Kong. I suspect smart ones have moved further offshore.

But what I found really interesting is a statement from Yahoo, which was passed onto British tech publication The Register:

Yahoo! is distressed that citizens in China have been imprisoned for expressing their political views on the Internet. We call on the US Department of State to continue making this issue of free expression a priority in bilateral and multilateral forums with the Chinese, as well as through other tools of trade and diplomacy, in order to help secure the freedom of these dissidents.

There is more, which you can go and read, but that's the most interesting paragraph. It employs a tactic which I have been seeing used by US Internet firms recently. That is to shift responsibility for tackling the issue onto the US Government. It makes sense that the firms want to avoid doing anything that could damage their interests in China. But by refusing to take a stand themselves and then calling on the US Government to do so in their place, they look shifty to me.

On the other hand, is there an alternative? If they challenge the Chinese Government directly, the Chinese will likely throw their Chinese subsidiaries out of the country without so much as a second thought, and block their international sites. Is any company willing to risk its China business on a principle? Despite a fair amount of public agonizing over the past year, the answer remains no.

Personally, I like having American Internet companies accessible in China. While local subsidiaries have been boiled into meek compliance, the fact that the global sites remain available and largely usable without restriction is valuable. It would be a shame if that was to evaporate.

But as long as US Internet firms try to have it both ways, they'll keep on running into trouble.