HONG KONG -- Andy Wang, an IT engineer at a Shanghai-based gaming company, occasionally felt a pang of guilt about his job. Most of his hours were spent on a piece of surveillance software called DiSanZhiYan, or "Third Eye." The system was installed on the laptop of every colleague at his company to track their screens in real time, recording their chats, their browsing activity and every document edit they made. Working from their floor in a downtown high-rise, the startup's hundreds of employees were constantly, uncomfortably aware of being under Third Eye's intent gaze.

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