How does government censorship affect business?

Governments around the world engage in internet censorship for a variety of reasons. However, this approach can have far-reaching consequences for local businesses.

In the liberal western world, internet infrastructure is built in a certain way that censorship is almost impossible to implement. 

However, in countries with less liberal and more authoritative regimes, the government has little trouble restricting what citizens see or do online.

Some countries with strong internet censorship policies include China, Iran, Pakistan, Russia, Saudi Arabia, Tunisia, and Vietnam.

Some of the policies promoting internet censorship (in these countries) were implemented to achieve the following:

  • Suppress dissent
  • Limit political freedom
  • Censor anything deemed immoral (like gambling or pornography)
  • Block terrorist propaganda

What are the pros of internet censorship?

Keeps the country safe from terrorist ideology

Restricting the spread of terrorist propaganda across borders is a good thing. This approach will help keep everyone safe from the horrors of terrorism.

Blocking foreign and violent ideologies can also help protect one’s culture and society as a whole. So in this scenario, the case for online censorship is a clear winner.

Helps local businesses thrive

Sometimes, censoring the internet can help local businesses gain a competitive advantage over international competitors. If we take China, for example, social media platforms like Sina Weibo, Renren, and Youku are thriving in the absence of their direct international competitors like Twitter, Facebook, and YouTube.

In fact, nine of the 20 largest internet companies (based on market value) are Chinese. At the same time, Chinese firms can trade aggressively and freely in the open internet and open market in Europe and North America.

But on the flip side, this creates an environment where cross border trade isn’t fairly reciprocated and creates unfair competition. Because of a lack of options, Chinese users also have to contend with companies like Tencent who have a shocking track record for privacy violations.

With the ongoing trade war between the U.S. and China, this situation can potentially get a lot worse for U.S. businesses operating in China.

Can curb the spread of fake news

In recent years, the spread of fake news has become a serious cause for concern. The fight against fake news is ongoing, and there doesn’t seem to be an end in sight.

However, if a country is actively engaging in internet censorship, it can potentially minimize or even stop the spread of fake news.

While censorship does have some benefits, blocking content for whatever reason can be tricky.

What are the cons of internet censorship?

Stifles innovation

Even though censorship protocols might have been implemented with the best of intentions, limited access to all available information can derail innovation.

Censoring information online, in real-time, can also get complicated, quickly. It can result in general (safe) content being blocked. For example, when the government blacklists a specific term for vague reasons, it can quickly have an impact on everyday websites, including e-commerce.

In China, if a word in your query has a sensitive word like “river,” and you search for it several times, your entire IP address will be blacked out for 90 seconds. This is because the way they pronounce the word “river” is the same as the way they enunciate the last name of Jiang Zemin, China’s former president (and therefore censored).

Limits business activities

If you’re operating a website in a controlled environment, you won’t be able to compete on a global scale. Furthermore, it can limit your access to leading suppliers and service providers.

When companies can’t access certain parts on the internet, they probably won’t be able to access the best resources for products and services. They won’t even know that they have better options that can be highly cost-effective.

Negatively impacts web analytics

When users are faced with internet censorship, they turn to Virtual Private Network (VPN) technology to get around it. This approach helps users bypass obstacles like the “Great Firewall.”

However, for online retailers and companies that rely on digital marketing, VPNs will lead to false web stats. So companies won’t be able to understand their target audience because the visitor’s IP address and identity will be twisted and hidden.

For example, when Twitter and YouTube were banned in Turkey, the number of VPN subscriptions skyrocketed. In a project targeting Italian speaking Turkish users, the company noticed that visitors from Turkey dropped from 44% to 23.9% after the ban.

At the same time, traffic from Switzerland and the United Kingdom increased dramatically. While these were considered to be “new visits,” they were actually the same visitors accessing the site through a VPN.

When you’re dealing with these types of challenges, it makes market strategies more complicated. It also increases the cost of online marketing activities.

This can result in businesses becoming less competitive as they have to allocate more resources towards getting around censorship protocols. Bad data equals bad business decisions, so the consequences can be significant.

When businesses are faced with such obstacles, it will make sense to move their operations to safe data havens like Switzerland. After all, to innovate and grow your business, you’ll need a stable and secure foundation.

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