By now, most people are familiar with the latest spat between Google and the government of China.  So that we are all on the same page, let’s establish a few facts:

• Despite protests of having an “open” Internet, the Chinese government actively censors information it finds unpleasant (1989 Tienanmen Square protests for example) and requires all search providers to do the same
• In 2006, Google agreed to the government’s censorship restrictions causing an unbelievable amount of hand wringing in the free speech community about how Google had violated it’s “Do No Evil” credo
• Google recently discovered that they along with several other companies had been the target of aggressive hacking that originated within China.  One of the targets was the Gmail accounts of Chinese dissidents
• No one with half a brain believes that the Chinese government is innocent.  They are actively hacking companies worldwide despite protestations to the contrary
• Google has expressed concern about the hacking to the Chinese government and suggested that they no longer wish the censor their results.  They are prepared to exit business in China if necessary.
• Google is clearly hoping that its threat to exit the country puts pressure on the Chinese government from the people who do not want to see Google leave.  They are banking on the fact that the Chinese government will not want to risk angering their people with one more restriction such that they have a general insurrection on their hands
• Google currently is the number 2 search provider in China with approximately 1/3 of the market.  The leader is Chinese company Baidu with more than 60% of the market according to this BBC article
• The Chinese search market is currently valued at about $1 billion, making Google’s piece worth about $330 million.

Okay, with the facts of the case out of the way, let’s dive in for a moment.

First of all, despite the chorus of approval from the free speech folks, Google’s primary reason for its proposed elimination of the search results filtering is that its really irritated by the Chinese Government’s attempts to hack it.  The announcement that it no longer wishes to censor is not made because it truly believes in an unfettered Internet, but rather because it needs to hit the Chinese government where it hurts.  So, no, Google’s not suddenly turned into a good guy here.

Secondly, let’s look at it from the government’s perspective.  Like it or not, the Chinese government sets rules for how companies need to behave inside their borders.  In the case of China, let’s face it, we are dealing with an evil, totalitarian regime here whose rules include censorship of information that is not politically convenient.  This  makes it very easy for the rest of the world to condemn those rules and applaud a company like Google for standing up.  Seen a different way though, the Chinese government has the right to impose whatever rules or restrictions it sees fit.  After all, it is the county’s government, and when a powerful multinational company like Google decides to stand up, it causes concern.  At the end of the day, we really don’t want powerful corporate interests openly pushing governments around.  Granted it happens all the time today behind closed doors, but at least everyone has to be somewhat circumspect.  If companies could openly challenge governments with impunity, things could get very bad, very quickly.

Let’s consider an alternate scenario and go back in time a few years to when the Feds went after Microsoft for its really nasty monopolistic practices.  And make no mistakes here – Microsoft was wielding its monopoly power like a club, crushing competitors and stifling innovation.  Suppose that Microsoft had responded to the Government in a different way?  What if they had cut a deal with the Canadian government, relocated from Seattle to Vancouver (not that long a trip), and told the Feds to go pound sand.

Sure, the Feds could have outlawed the sale of any Microsoft software in the U.S., but given how pervasive their products are, all Microsoft would have had to do would be to cut off all support for their products in the U.S.  They probably could have revoked the Federal government’s software licenses and even placed some code as part of Windows update that would start turning off servers in Government organizations.  The end result would have been a serious disaster.  Obviously Microsoft’s revenues would have taken a severe hit, but things would have been even worse for the U.S. with all support cut off.  While this scenario may make Mac or Linux advocates salivate, the reality is that the transition from Windows to something else would be long, messy, and ultimately would lead to some severe economic problems.  It is even possible, if Microsoft played their cards right, that they could turn voters against the Federal Government and have a whole generation of politicians thrown out on their collective butts for daring to take on Microsoft.

Okay, the scenario that I just painted is highly unlikely, improbable, and in many ways, downright silly,  but it does sit just barely within the realm of possibility because Microsoft was allowed to grow to such an extent that it became very powerful.  The results of the lawsuit, while considerably more mundane than my scenario, back up my point.  Most people agree that Microsoft got a slap on the wrist and while they were forced to abandon certain practices such as making PC manufacturers buy a copy of Windows for every machine sold – whether the customer wanted Windows or not, for all intents and purposes, just about every PC sold today is sold with a copy of Windows because that is what the customer wants.  Yes, I know that some PCs are sold with Linux, but the number of of PCs sold with a non-Microsoft OS as a percentage of all PCs sold is almost too small to even measure.  (Note: I’m using the term PC to refer to non-Mac systems).

Going back to my original point; Google’s action when seen through the eyes of the Chinese government should be very disturbing.  If Google wins this round, it will have set a precedent where one of the most powerful corporations in the world has pushed around one of the most powerful Nation States in the world.  For me, this is a frightening prospect.  While I deplore how the Chinese government treats its citizens, I have to say that in this case, I’m hoping that the Chinese government slaps Google hard and boots them out of the country.