The war in Ukraine sparked a never-before-seen mass exodus of businesses from Russia. Corporations that spent years gaining a foothold in the growing consumer market pulled out nearly overnight, with their lucrative operations suddenly looking like liabilities.
The exodus shines a spotlight on what some of those companies were doing in Russia in the first place — and why it took an act of war to make them change their tune. One company particularly in that spotlight is Nokia.
On Monday, the New York Times revealed how Nokia has for years provided equipment and services that propped up Russia’s vast surveillance system that has been used to spy on dissidents. Although Nokia denounced the invasion of Ukraine and said it would halt sales in the country, the company told the Times that it was required to make products that comply with the surveillance system.
In other words, this was simply the cost of doing business in Russia.
In a statement, Nokia said the Times article is misleading, emphasizing that the company “does not manufacture, install or service” the surveillance tools. “We condemn any misuse of lawful intercept to infringe on human rights,” it said. “To prevent this, there is a strong need for multi-lateral action to ensure sufficient frameworks are put in place.”
Laws vs. ethics
There’s no evidence Nokia did anything illegal, but ethics and laws aren’t the same thing.
It’s hard to imagine Nokia didn’t know what was going on in Russia. One expert on Russian intelligence who spoke to the Times said Nokia “had to have known how their devices would be used.”
Experts say there’s no business (or consumer, for that matter) that can keep its hands perfectly clean. The vast and interconnected nature of global supply chains make it all but impossible to avoid some interaction — directly or indirectly — with corruption, labor exploitation or other unsavory elements of global commerce.
The question, then, is how close you are to the bad behavior, says Jason Brennan, a professor of business ethics at Georgetown University.
“No one’s willing to swim in a pool when there’s a dead body in the pool, but you’re willing to swim in the ocean…It’s sort of about the concentration of death around you,” he says. “Markets are a little bit like that too.”
That is, Nokia might not have made the tech that spied on Russians, but it may have effectively shown Russian authorities how to plug it in, and that should have been a big red flag for the company’s top brass.
The documents reviewed by the Times show the company knew it was enabling Russia’s surveillance apparatus. It was an essential and lucrative business for Nokia, the Times reports, bringing in hundreds of millions of dollars in annual revenue.
Nokia called on governments to set clearer rules about where technology can and can’t be sold. “Nokia does not have an ability to control, access or interfere with any lawful intercept capability in the networks which our customers own and operate,” it told the newspaper.
This is a common refrain from large companies that struggle to police themselves: They ask governments to step in to protect them from our basest impulses. (See: Zuckerberg, Mark.)
Striking a balance
This is hardly a new dilemma for multinational corporations. Big Tech, in particular, has struggled to strike a balance between democratic ideals of free speech and privacy and the realities of doing business in authoritarian markets such as China and Russia, where those rights are absent.
Apple, for example, has long prided itself on ensuring customers’ privacy. But in China, Apple has had to bend those values to comply with regulators.
A Times investigation last summer found that Apple aided in government censorship in the Chinese version of the App store and put Chinese customers’ data at risk. Apple denied some of the report’s findings, saying it removed apps only to comply with Chinese law.
Similarly, chips made by Intel and Nvidia allegedly help power the computers China uses in its mass surveillance of Muslim minorities.
And last year, Microsoft said it inadvertently took down images of the 1989 Tiananmen Square crackdown around the globe on its Bing search engine — a rare instance of China’s strict internal censorship spreading beyond its borders.
Tech leaders including Tim Cook, Apple’s CEO, have argued it’s better to participate in authoritarian markets than to stand on the sidelines. But that often means complying with regimes responsible for human-rights abuses — and, at times, aiding them in those pursuits.
Brennan, the business ethics professor, argued companies shouldn’t directly assist a totalitarian government, even if local laws compel them. “You can’t do it because you were ordered to do so, and you can’t do it for money,” he said.
And if that means losing a ton of money, well, too bad. “You can’t do evil for $200 billion. You can’t do it for a million. That’s just basic ethics,” Brennan added.
All of that said, there’s good news for companies like Nokia looking for help reining themselves in: Doing the right thing is good business. It isn’t just good for PR — it’s good for the bottom line.
Consumers and investors are increasingly aware of their companies’ behavior, and corporations have taken note. Look how quickly Disney turned around its response and actions after at first refusing to oppose Florida’s so-called Don’t Say Gay bill. And the speed of the Russia exodus among Western brands underscores a relatively new era in which investors and customers are demanding brands do more than maximize profits at all costs.
So companies should do the right thing and pass up often-lucrative opportunities to help adversarial governments’ bad intentions. If they give into their impulses, there will be consequences for their actions — for the companies, and for the world.