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I agree with the prevailing sentiment here regarding censorship of user submitted content on sites like youtube. I can also see it would make more economic sense for google to simply deny the service to Italy if the case succeeded. But wait a minute! Doesn't google already censor content for China?

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It's not about retroactively censoring, it's about proactively making sure the content isn't there in the first place, aka monitoring, which would be impossible at scale.

Also, monitoring would open Google up to even more liability: "We're not quite sure if this video is illegal, let's bring it to court. Hey, the courts have found this video to be illegal! And you reviewed it and approved it. You're responsible!"

Google does proactively censor:

Search for June 4th: google.com 2,780,000 hits, google.cn: 164 hits

Try posting a blog entry and reference "June 4th" in it and see if it ever shows up in google.cn

Don't be evil, unless there's yuan at stake...

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