BOB GARFIELD: This is On the Media. I'm Bob Garfield.

BROOKE GLADSTONE: And I'm Brooke Gladstone. Microsoft, Yahoo, Google and Cisco were called to Capitol Hill on Wednesday to answer charges that they are collaborating with a repressive regime, namely, China. Now these fresh-faced, forward-looking companies are not used to being pegged as the bad guys. They're not big oil or big tobacco. But with people being jailed because Yahoo gave information to Chinese police and blogs shut down by Microsoft at the request of Chinese officials, these companies face a profound and very public moral dilemma over the real cost of doing big business. From Washington, Jessica Smith reports.

JESSICA SMITH: Suddenly, these icons of new media are looking at a stain spreading like an oil slick over their image. On Wednesday, they took a tongue-lashing from both side of the aisle. Here's New Jersey Republican Chris Smith. He chaired the hearing at the House Human Rights Subcommittee.

CHRIS SMITH: Women and men are going to the Gulag and being tortured as a direct result of information handed over to Chinese officials. When Yahoo was asked to explain its actions, Yahoo said that it must adhere to local laws in all countries where it operates. But my response to that is if the secret police a half century ago asked where Anne Frank was hiding, would the correct answer be to hand over the information in order to comply with local laws?

JESSICA SMITH: California Democrat Tom Lantos addressed the lawyer from Cisco, a company now under attack for its sales of high-tech surveillance and fingerprinting technology to Chinese police.

TOM LANTOS: Is there anything that you have done in the whole period you operated in China that the company ought to be ashamed of?

MAN: Our company provides access to information for people all over the world, including China, on a consistent global platform which maximizes the opportunity for freedom of expression. And we think that is a positive thing that we do throughout the world, including China.

TOM LANTOS: So your answer is you have nothing to be ashamed of.

MAN: My answer is I feel that our engagement is consistent with our government's goals and its a positive… [OVERTALK]

TOM LANTOS: Let me move on to your colleagues. What is your answer, sir?

JESSICA SMITH: Lantos, a Holocaust survivor, moved on to Google's Elliot Schrage.

ELLIOT SCHRAGE: We've complied with legally binding orders, whether it's here in the United States or in China or any of the other 90 countries that [ ? ] [OVERTALK]

TOM LANTOS: Well, IBM complied with legal orders when they cooperated with Nazi Germany.

JESSICA SMITH: One of the problems for these companies is that they can't operate in China unless they comply with Chinese law. But they can't not operate in China. It's too big of a market. There are more than 110 million Internet users there, and the Internet is transforming China. Microsoft lawyer Jack Krumholtz voices the general industry justification for doing business there.

JACK KRUMHOLTZ: We too think, on balance, that it's better for these, for Microsoft and the other companies here at the table and other U.S. Internet companies, to be engaged in China. We think that the benefits far outweigh the downside in terms of promoting freedom of expression.

JESSICA SMITH: One lonely lawmaker voiced sympathy for the company's China dilemma. Washington State Democrat Adam Smith.

ADAM SMITH: Let's assume for the moment that no U.S. tech company does business in China. Does it get better? Is it less repressive? Does China move forward? I don't think so, not in the least bit.

JESSICA SMITH: At the end of the four-hour grilling, the companies looked pretty charred.

BOB DIETZ: I heard nothing today that would make me think that anyone using the Internet in China will be any safer in the near future than they have been in the past.

JESSICA SMITH: That's Bob Dietz with the Committee to Protect Journalists. He says most of the Chinese citizens jailed as a result of Internet activities are journalists or bloggers, and the only thing the U.S. can do is pressure U.S. companies not to assist in any repression. But Dietz is skeptical anyone in the U.S. can do anything to change censorship in China.

BOB DIETZ: Those problems will be resolved by the Chinese and the Chinese people and Chinese journalists confronting their own government. We certainly might assist them or work with them and try and help them, but finally it's a Chinese problem.

REBECCA MacKINNON: Yes. the Internet does facilitate freedom of speech and free flow of information.

JESSICA SMITH: That's Rebecca MacKinnon, a research fellow at the Berkman Center for Internet and Society at Harvard Law School. She blogged from the hearing.

REBECCA MacKINNON: But, you know, there are also uses of technology that can be quite evil. And so I think just to say oh, over the long run the Internet is going to make the Chinese more free so therefore we shouldn't be held responsible for the ruining of individual lives -- I don't think that gets them off the hook.

JESSICA SMITH: She says the pressure applied by these hearings parallels what happened to American manufacturers operating in the '80s and '90s in the Third World.

REBECCA MacKINNON: -- where, you know, suddenly a lot of attention was put by human rights groups on child labor practices, on environmental practices, and now it's considered normal that companies have to be careful about the environmental and labor implications of what they're doing around the world.

JESSICA SMITH: MacKinnon notes that the companies are already responding to the pressure. There's talk of setting up new codes of conduct. The Administration weighed in this week with the announcement of a new Global Internet Freedom Task Force. On Thursday, Congressman Chris Smith put forth a proposal aimed at protecting U.S. companies from being forced to cooperate with repressive governments. It's not clear how much any of these efforts will influence regimes to moderate their behavior. What is clear is that these hearings have put new media companies on notice that they're no longer flying under the radar of Congress and public opinion. They're huge corporations with huge bottom lines, and they have to live with the scrutiny that goes with that. For On the Media, this is Jessica Smith in Washington.