So Yahoo has reached a settlement with the families of Chinese journalists who were jailed after the company ratted on them. It comes after a savaging from Congressional representatives but this case is not going to go away.

As Bloomberg's Ann Woolner points out, this case really highlights the dark side of dealing with a totalitarian regime and could be a warning to any Western company doing business in China. The case of editor Shi Tao is a case in point. He was convicted in 2005 for disclosing a "state secret" via Yahoo e-mail. But what exactly was the secret? China's nuclear program? Military moves? No, it was simply a government directive to Chinese news organizations setting out what they could report about the approach of the 15th anniversary of pro-democracy demonstrations in Tiananmen Square.

That says a lot about China. But it speaks volumes about Yahoo and other companies doing business with China, like Cisco, Skype and Google, says Professor Peter Navarro.

"Business executives have justified their actions with a 'when in China, do as the Chinese do' defense," writes Navarro. "To do business in China, these executives insist, they must comply with local laws. But China's local laws often force executives to make moral and ethical choices that would be intolerable in the West.

"The broader problem is that American business executives have little training in how to deal with ethics in a corrupt and totalitarian global business environment; blame U.S. business schools for that. As a result, moral horizons tend to be short, and executives who find themselves in the heat of a battle don't know where to draw the line, which is what happened to Yahoo ... What's missing from the American corporate perspective is this bigger picture: The collaborative tools that U.S. corporations provide to spy on, and silence, the Chinese people are far more likely to help prop up a totalitarian regime than topple it.

"With American corporate help, China remains the world's biggest prison."

And as programmer Seth Finkelstein writes in The Guardian, the case shows that corporations like Yahoo and Google have enormous blind spots.

"The price of total personalization is total surveillance," writes Finkelstein.