If corporations are people, then laws are corporation's moral compass. The solution would likely be to produce regulations to provide a moral compass to corporations so that they are required to exhibit the behavior we would like them to have. Corporations are legal automatons, and need to be treated as such.
This doesn't necessarily mean we need more rules - we could easily improve regulation by creating rules with fewer, broader commands. Certainly, this would create some inefficiency, but it would be inefficiency on the commercial side, rather than the legislative one. (i.e. simpler, broader laws make certain commercial activities illegal when there might be nuanced reasons that they should be allowed, vs detailed and exhaustive regulations create more corporate opportunity but also more loopholes and regulatory surface area.)
This is pretty challenging for a multinational corporation operating in a globalized world.
The issue here is that Google is trying to produce a product that conforms to Chinese laws for doing business in China. These laws are deeply offensive and immoral to many people in Google's largely-American workforce.
Trying to create a moral compass that multinational corporations can live by requires creating laws that apply to everyone on earth. Personally, I think that's a great idea. Then the hard work is in finding a set of global laws that everyone can agree on, and that's the sticking point, because peoples' moral sensibilities on earth are largely contradictory.
Americans would be quick to say "Well, we should all operate under democracy - let the people decide what these laws should be", not realizing that if we actually did world democracy 1-person-1-vote style, the legal framework they would live under would likely be some weird amalgamation of the Chinese & Indian political systems, because close to 50% of the population lives in those countries. America would get about 5% of the vote, so it's a good bet that our wishes would be ignored. Personally, though I love the idea of world government in theory, I didn't sign up for those conditions. Given the general resistance to globalization by populist bodies in basically every nation on earth, most other people didn't either.
Doesn't this, in and of itself, tells you just how "multinational" Google really is?
There's no real issue with creating laws that apply to everybody here. Google is developing this thing in US. Therefore, American laws - and American cultural sensibilities - apply. If they don't want that, then they can do that development in China, by the workforce (and I mean executives in charge of the project as well as coders) that is subject to the same laws that they're working to implement.
I suspect that most of the staff who's actually developing the product are in China. The way things worked while I was at Google (which spanned the period when they pulled out, though I'd left by the time they decided to get back in) was that the bulk of development for google.cn would be done by Google China staff, and they would get some consulting support from engineers on critical serving infrastructure (eg. the webserver, the search serving stack) for parts where it needs to interface with the rest of the codebase.
The thing that's come back to bite Google now is that they have a culture of being very open internally. So for example, all the design docs, technical mailing lists, org chart, and source code repository for any work on Dragonfly is open to all Googlers. The article said that it's Googlers who do not work on Dragonfly that have been monitoring the source repository and leaked this to The Intercept; they may be American workers with American cultural sensibilities, but that doesn't mean that they're developing Dragonfly.
If this were Apple, they'd farm out all the human rights abuses to Foxconn [1], and the rest of their employees wouldn't know about it until it shows up in the press. I suspect the result of this is that anything Dragonfly-related is going to be designated HIP (High-value Intellectual Property, the category of source code where access is restricted to specific engineers) and all design discussions and mailing lists related to it will be locked down. That, IMHO, would suck for Google's culture, but I don't work there anymore so at least it doesn't affect me.
American companies have to follow American laws. If those laws are incompatible with China's then too bad, those companies can't make money in those exact ways. There's no need to fearmonger about a non-existant world government.
That gets complicated too. The way multinationals are usually setup - particularly with incompatible jurisdictions like US + China - is for a new company to be formed in the country they want to do business in, but with shares wholly owned by the parent. (In the case of China, they often need to partner with a domestic Chinese company that owns some of the shares - this is a sticking point in US/China trade relations, because it's commonly a front for industrial espionage.) Google China is not an American company; it is a Chinese company, headquartered in Beijing, that is partially owned by Google, which itself is owned by Alphabet.
If you want to block cross-border capital flows, you're looking at a lot of collateral damage. Apple, Coca-Cola, Pepsi, Nike, McDonald's, KFC, Altria (Phillip Morris), and many others would lose > 50% of their revenue if they could not do business through international subsidiaries that operate according to the laws of the country that they do business in. That's a lot of American jobs lost and a lot of underfunded pension plans.
The problem with a lot of "too bad - just close the borders and have American companies build things in America for Americans" is that it ignores that the 1950s utopia they want to go back to was itself built on globalization. America was the engine of the Marshall Plan, and basically rebuilt the world after WW2. That allowed Americans of the 50s-80s to enjoy standards of living well above what the domestic economy would support. If we actually wanted to shut ourselves off from the world, the resulting economy would likely look a lot more like the America of the 1850s (before steamships made crossing the ocean a routine occurrence) or the North Korea/Cuba/Iran of today (as examples of other countries that have isolated themselves from the world economy).
