I would agree with you, Fran, but Google (and other search engines) are walking on a very thin line here.
They publish regular reports on the amounts of sites/links they had to take down to show the public that it's not them doing to censoring.
But they also have to comply with local laws, and they took (I think) a very good stance in China, but it didn't get them anywhere.
In the end, they either comply or get fined and fined and fined. And that's what rulings like this one are leading to.
They picked a fight and lost, now it's up to them whether to stay in the market and compromise their believes, or just pack up and leave.