Here’s Google CEO Eric Schmidt, at Davos, defending the company’s decision to censor search results in China: “We concluded that although we weren’t wild about the restrictions, it was even worse to not try to serve those users at all. We actually did an evil scale and decided not to serve at all was worse evil.” Others have also put Google’s decision on the “evil scale” and found that the good outweighs the bad. Here’s David Weinberger: “It’s a tough world. Most of what we do is morally mixed … If forced to choose – as Google has been – I’d probably do what Google is doing. It sucks, it stinks, but how would an information embargo help? It wouldn’t apply pressure on the Chinese government. Chinese citizens would not be any more likely to rise up against the government because they don’t have access to Google. Staying out of China would not lead to a more free China.”

Once you jettison Google’s “don’t be evil” absolutism, in other words, it becomes possible to make a relativist argument that Google did the right thing. The argument hinges on a historically dubious assumption – that you have a better chance to change a government’s behavior through appeasement than through confrontation – but that doesn’t necessarily make it wrong in this particular case.

That’s not the whole story, though. As John Gapper explains in an op-ed in today’s Financial Times, there is a practical case to be made that Google, like Yahoo and Microsoft before it, made the wrong choice in collaborating with the Chinese government. “Internet companies,” he writes, “cannot simply shrug off their opportunism in China.” Unlike other companies that choose to do business in China on the government’s terms, “internet giants should be held – and should hold themselves – to higher standards.”

Why? Gapper points to two reasons. First:

the internet industry is regulated far more lightly than many others. The internet is treated as an open space for the public, a creative commons not subject to the restrictions that bind other areas of communications … We know how fragile the self-restraint of regulators and governments becomes when people believe companies are abusing their freedoms … Internet companies enjoy unique privileges at the moment and could easily find them taken away if their reputations deteriorate.

Gapper notes that Google has fought hard to maintain the internet’s neutrality – to prevent telephone and cable companies from giving preference to certain content running over the network. But Google’s case weakens substantially when it begins to compromise the network’s neutrality itself. If Google can work with the Chinese government to give some speech preference over other speech – to draw distinctions between different forms of content on purely political grounds – it becomes much harder for it to argue against other companies drawing distinctions between different kinds of content on purely commercial grounds.

Gapper’s second reason:

the internet acts for most of us as an instrument of liberation … It brings a means of communication through e-mail or instant messaging that crosses national borders. Through search engines such as Google, it also allows us to find and peruse a huge amount of information … That is a double-edged sword. A search engine is wonderful if you are the searcher but what about when a government searches for you? That happened to Shi Tao, a dissident Chinese journalist sentenced to 10 years in prison last year for “revealing state secrets” after Yahoo submitted to the government’s demand to know who was using a Yahoo e-mail address.

The internet’s special status hinges on trust, in other words. It’s hard to sustain that trust if you agree to collaborate with repressive regimes.

“In these circumstances,” Gapper concludes, “the internet giants ought to tread very carefully. The benefits of an open internet, free from clumsy regulation and inquisitive authorities, have been huge. But they need not last and will be curtailed if the public loses faith in Google and others. China is a vast market but what does it profit an internet company if it gains the whole world and loses its soul?”