I've written before on the legislation introduced in Congress to deter internet providers from sharing data with governments that may use it to prosecute dissidents. The House Foreign Affairs Committee--which has approved that legislation--also held a hearing on November 6, to grill Yahoo for its testimony regarding the case of Shi Tao.

It seems that the Congressional brow-beating has caused Yahoo to settle the case brought against it by the families of Shi Tao and another dissident:

On Nov. 13, Yahoo decided to pay: It settled a lawsuit with the families of imprisoned journalist Shi Tao and political dissident Wang Xiaoning, both of whom were given 10-year sentences after the Internet company turned over information—from personal e-mails and anonymous posts on Yahoo message boards—to the Chinese government. The amount Yahoo will pay was not disclosed. "After meeting with the families, it was clear to me what we had to do to make this right for them, for Yahoo, and for the future," said Yang in a statement.

Yahoo also is establishing a fund to provide humanitarian and legal aid to people serving prison sentences for expressing their opinions online. The company is still working out the details of who will be eligible for aid, how much will be offered, and how it will be administered. "At Yahoo, we believe in the transformative power of the Internet," Yang's statement said. "That's why we are so committed to working to support free expression and privacy around the world."

While terms of the settlement have not been disclosed, the group that brought the suit on behalf of the dissidents' families says that they are pleased:

The terms of the settlement were not disclosed and are to remain confidential. But the plaintiffs and their families are pleased, according to Morton Sklar. He's the executive director of the World Organization for Human Rights USA, the Washington-based group that brought the suit on behalf of Shi and Wang. "Everyone's first priority is getting the prisoners released. What everybody realized was that if this case continued, that would take four or five more years."

It's unclear if Smith's legislation--the Global Online Freedom Act--will be considered by the full House. Nevertheless, the incident shows the power of Congress to affect how firms do business, without ever passing a law.