http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/01/28/BUG4FGUND81.DTL
"Google Inc.'s recent decision to censor search results in China has raised eyebrows in Congress, which has invited the company, along with its chief competitor, Yahoo Inc., to answer questions about excluding political material that the Beijing government deems subversive."

> Brad Dayspring, a spokesman for Smith, said that the congressman is considering drafting legislation that would put some restrictions on Internet companies that could include rules about censoring search results, and require them to locate e-mail servers outside a country that limits free speech. As a result, it would be harder for a government like China's to subpoena e-mail records that could implicate critics.

Can the US govt. really make laws about what companies do in other countries?

>Can the US govt. really make laws about what companies do in other countries?

Actually, it's about time someone lays out some rules about this.
For example, the Yahoo's Nazi memorabilia story was a mess. First Yahoo won, then (sort of) lost (judges said that the free speech issues were not "ripe" for review).
http://www.canada.com/topics/technology/story.html?id=39a30ef3-4f28-42a1-92e3-82f1119788cd

It seems to me that even if American technology companies are forced to play under the rules of the country they do business with, it's better to make their products available (despite being crippled) than not have them there at all. It at least allows for another service by which local users can discover means of communicating with peers and circumvently establish networks under the government's radar. Alternatives are always a good thing.