Microsoft in China: Aiding Oppression?

So Microsoft is extending its Spaces weblog service to China, and has decided to refuse the use of certain red flag words that smack of dissent or political opposition to the Chinese government.

A sensitive response to cultural differences, or an ethical cop-out by a company that can afford to put its money where its ethics should be?

It's a difficult question to answer.  If Microsoft forged ahead, allowing open dissension on its blogs, would that help or hinder the supporters of greater democracy in China? If there is any possibility that people who stand and up and disagree with the government on weblogs will be rounded up and imprisoned, then maybe Microsoft is doing them a favour by not giving them the impression they can safely express themselves on the blog service.

On the other hand, the comparison to companies deciding whether to support the South African apartheid regime strikes a chord with me. David Weinberger argues that not only is it appropriate for a company to refuse to facilitate political oppression, Microsoft is going even further by disallowing behaviour that isn't even illegal in China.

From my reading about the issue, I have to side with those who criticize Microsoft for being a little too willing to squelch free expression.  It's one thing to stick to the local laws (even if they violate human rights). It's quite another thing to go beyond the local laws and restrict activities that all countries in the world should allow (in this case, using the word "democracy" and some other hot words in the title of your blog).

Microsoft blogger Robert Scoble's response to the issue.
Dan Gillmor criticizes Microsoft for its behaviour in China.