Not at all - I actually applaud Google for standing up to the government if they don't think it is the correct course of action. THis is why we have courts. I have stated that I understand their reasoning, though I don't consider it to be a threat.
I suspect the worst from Google not because of that, but because they are participating in active censorship with a Communist and oppressive government. This is by their own admission, and clearly against their own motto of "don't be evil".
My argument was hyperbole. You are most certainly correct that China probably has the info already.
I simply find it amazing that, in the name of freeedom and privacy (both exceptionally worthy things to pursue) Google has said they will not give the info to the US government. OK. However, the same thing isn't a high priority in dealing with the Chinese.
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