Nov. 13 (Bloomberg) -- Yahoo! Inc. agreed to provide legal, humanitarian and financial support to the families of two jailed Chinese dissidents to settle claims it committed human rights abuses when it gave China information that led to the men's arrests.

Yahoo, the most-visited U.S. Web site, will also create a humanitarian relief fund to provide legal aid to other political dissidents imprisoned for expressing their views online, the company said today in a statement. Other details of the lawsuit settlement weren't 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,'' Chief Executive Officer Jerry Yang said in the e-mailed statement. ``We are committed to making sure our actions match our values around the world.''

Yang apologized to the mother of journalist Shi Tao and the wife of writer Wang Xiaoning, the plaintiffs, at a Nov. 6 congressional hearing. Some lawmakers criticized the company for turning over e-mail addresses and other information that allowed Chinese authorities to learn their identities. Shi and Wang sent pro-democracy information on the Internet via email or Yahoo groups, their lawsuit said.

Yahoo General Counsel Michael Callahan said Nov. 6 the company would consider a settlement after lawmakers urged it to resolve the case and provide aid to the dissident's families.

Tongue-Lashing's Effect

``It took a tongue-lashing from Congress before these high- tech titans did the right thing and coughed up some concrete assistance,'' U.S. Representative Tom Lantos, a California Democrat, said in a statement. ``In my view, today's settlement is long overdue.''

The case highlighted the dilemma technology companies face as they expand in countries with speech restrictions. The U.S. House Foreign Affairs Committee last month approved legislation making it a crime to aid countries limiting Internet access, citing Yahoo's role in Shi's arrest.

Morton Sklar, director of the World Organization for Human Rights USA, which sued Yahoo on behalf of Shi and Wang, said the accord will help the families pursue legal claims in China.

``It's a terrifically important precedent, helping to establish that U.S. corporations are not obliged to simply follow orders in their host countries but have to abide by U.S. laws and U.S. human-rights standards,'' Sklar said in a telephone interview.

He declined to comment on whether the accord included agreements about future conduct.

Out of China

Kelley Benander, a Yahoo spokeswoman, said the Sunnyvale, California-based company doesn't operate a subsidiary in China. In 2005 Yahoo sold its Chinese operations to Alibaba.com Corp., operator of China's largest online trading site for companies.

Yahoo owns a 40 percent stake in Alibaba, and legal decisions will be made by Alibaba, Benander said.

Yahoo is trying to get Wang and Shi out of jail, Yang said Nov. 6.

In the lawsuit, filed in April in San Francisco, Wang claimed Yahoo's Hong Kong subsidiary gave Chinese officials e-mail records, e-mail addresses, user identification numbers and other identifying information about him. In 2000 and 2001, Wang posted his journals and pro-democracy articles with a Yahoo e- mail group and sent his writings anonymously to e-mail addresses.

The information helped Chinese officials to identify and convict Wang, who was sentenced in 2003 and has suffered severe physical and psychological abuse in prison, he said in court papers.

10-Year Sentence

Shi was sentenced to 10 years in prison in 2005 for sending a government memo about potential civil unrest on the anniversary of the Tiananmen Square crackdown to overseas Web sites, Reporters Without Borders said in September 2005.

In April, Yahoo said if companies doing business in China don't comply with Chinese law, their local employees could face civil or criminal penalties.

Yang told lawmakers Nov. 6 that Yahoo is committed to protecting human rights abroad and is working with human-rights groups to develop an industry code of conduct for technology companies.

Alibaba.com is Asia's second-biggest Internet company by market value and the operator of China's biggest trading Web site.

Google accounted for 61 percent of global search queries in August, ahead of Yahoo's 14 percent and Microsoft's 4 percent, according to Reston, Virginia-based ComScore Inc.

Yahoo was the most-visited site in Asia in May, according to ComScore, followed by Microsoft and Google. China was home to 162 million Internet users at the end of June, second only to the U.S., according to the government-backed China Network Information Center.

The case is Wang v. Yahoo! Inc., 07-2151, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net.

Last Updated: November 13, 2007 17:43 EST