It’s all about respect for the local culture, of course.

Skype, which lets people to make phone calls over the Internet for free, has joined the ranks of other big tech companies in defending its practice of censoring speech in China, according to an article published earlier this week in the Financial Times.

In the article, Niklas Zennstrom, Skype’s chief executive and founder, told the Financial Times that the company’s Chinese partner Tom Online has been censoring words such as “Falun Gong”, “Dalai Lama” and “Tiananmen Square ” in text messages.

Zennstrom defended the practice by saying that adhering to local laws was the price of doing business in any country. He likened the censorship laws in China to any other laws that exist in Western countries, such as the United States or Germany.

The Financial Times quoted him saying, “I may like or not like the laws and regulations to operate businesses in the U.K. or Germany or the U.S., but if I do business there I choose to comply with those laws and regulations. I can try to lobby to change them, but I need to comply with them. China in that way is not different.”

I understand and respect the need to comply with local laws – to a point. You can’t drive on the wrong side of the road or not pay taxes. Actively aiding and abetting censorship, however, raises red flags. And when complying with the local law means participating in the persecution of innocents, that soft, weak, idealistic liberal side of me says a line needs to be drawn. Usually, in normal circumstances, it’s pretty clear where the line should be drawn and how thick that line should be. But China isn’t like most other places, and when there’s big money involved, things get blurry, and otherwise decent compassionate people find their values shifting in synch with the dollar signs. And no, I don’t have a magic solution for this situation and I do understand why Skype and Google and Yahoo and Microsoft are kowtowing to the Party. Is it right? I guess we each have to decide that for ourselves.