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The funny thing, and one which shows the double standards of google, is that they won't help the US gov to find terrorists, but they will help the Chinese gov by blocking access of their citizens to websites and search terms.

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aren't they just following the laws of both counties?

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I don't think there is a law in the U.S. that states that Google can't turn over the information the U.S. government seeks. It's a business decision by Google.