The news that Microsoft's new China MSN blogging portal is censoring "prohibited language" such as "democracy, freedom and human rights" is unsettling to say the least.

"MSN abides by the laws, regulations and norms of each country in which it operates," said Brooke Richardson, MSN lead product manager.

Every country has its rules that companies must play by, but what if these rules are just plain wrong? I understand that Microsoft is desperate to do business in China and I understand that if Microsoft doesn't play by China's crazy rules that some other multinational most certainly will (see Yahoo!, eBay and countless others). Privately, many executives tell me that they are playing nice with China in the hopes that these rules one day are relaxed. But by playing by the rules aren't you giving China less incentive to relax them?

The mark of a great company is one that is not afraid to turn away business if it violates their sense of ethics. When American-based companies assist a government in banning the use of words like "freedom" and "democracy" these companies have become part of the problem and not part of the solution. This isn't localization; this is capitulation.