WASHINGTON -- Two U.S. companies that sell Internet addresses to Web sites said Wednesday they had stopped registering new domain names in China because the Chinese government has begun demanding pictures and other identification documents from their customers.
One of the domain name companies, Go Daddy Inc., announced its change in policy at a congressional hearing that was largely devoted to Google Inc. ( GOOG - news - people )'s announcement Monday that it will no longer censor Internet search results in China.
Christine Jones, executive vice president and general counsel of Go Daddy, said the company's decision was not a reaction to Google but instead reflects its concern about the security of its customers and "the chilling effect" of the new Chinese government requirements.
"We just made a decision that we didn't want to act as an agent of the Chinese government," Jones told lawmakers.
Separately, a company that offers similar services, Network Solutions LLC, also said Wednesday it had stopped handling China Web registrations in December, for the same reason.
Zhong Shan, China's vice commerce secretary in charge of foreign trade, said he hadn't been briefed on the Go Daddy decision.
Speaking to reporters at the Chinese Embassy in Washington, however, Zhong called Google's decision an "exceptional case" that wouldn't undermine the confidence of foreign investors in China. He said China's economy wasn't perfect, but that the government is working to create a more attractive investment environment.
"China's policy of opening up remains unchanged," Zhong said through an interpreter. "We still welcome foreign investment."
Go Daddy - a company known for risque ads that mock congressional hearings - has been registering domain names in China since 2005 under authorization from the China Internet Network Information Center, a quasi-government agency. The company currently manages about 27,000 ".cn" domain names. That's a small slice of Chinese Web sites, and ".cn" names continue to be available through other resellers.
Go Daddy said the agency has always made the company, known as a registrar, collect customer names, addresses and other contact information since it began registering ".cn" Internet domain names. But late last year, Go Daddy said, the Chinese agency changed its policy to require ".cn" domain name registrars to also collect head shots, business identifications and signed registration forms from new customers and then forward that information to the agency.
Then, Jones said, the agency instructed domain name registrars to obtain this same information from existing customers and forward it too - warning that Web sites of customers who refuse to register would be disabled.
Go Daddy said it has contacted 1,200 of its customers with ".cn" Web sites, asking for the additional documentation and informing them that it would be handed over to the China Internet Network Information Center. The company said only about 20 percent of those customers have provided the documentation.
Now, Jones said, the company won't register new names. She did not say how much of the company's revenue the business was bringing in.
Network Solutions said in a statement that it dropped the service in December because the Chinese policy was "intrusive" and would have placed a burden on its customers.
Similarly, another domain name registrar based in the U.S., eNom Inc., wants to continue offering ".cn" Web addresses, but is worried that the changes China has ordered "could make it almost impossible to do it," said Jeffrey Eckhaus, general manager at eNom.
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