Google could be in position to be closed-down in Brazil because they refuse to hand over data. A fine of $61 million is also possible.

Sao Paulo based federal prosecutor’s office said that pages on Google’s Orkut social networking site are used to promote child porn and other criminal activity. So the prosecutor wants a federal judge to order Google Brazil to hand over the data on users associated with those pages.

Google maintains that as the data is housed on a server in the US, the request should be made to Google headquarters in the US.

Meanwhile Google in Brazil is using the defense that it has already handed over all the information that is able to and does not have the data about Orkut users that is being requested.

This situation brings into attention a problem that faces all search engines. Keeping information about users and their searches into the databases.

Recently, AOL made a huge mistake (the road to hell is paved with good intentions) to release 658,000 logs from its users to its research site. Even if they said that the data is safe and anonymous, at least one case where a person was discovered based on its actions exists.

Early this year, Google successfully defended a subpoena from the US Department of Justice to hand over its data in another child porn investigation case.

No doubt, Google wants to use the same US laws to protect itself from the Brazilian legal system. The problem is that Brazil, like many other countries, may decide that data associated with websites that target audiences in its jurisdiction also falls within its jurisdiction, especially in criminal investigation cases. If a Brazilian judge decides that Google must hand over data or pay a hefty fine and shut down its local operations then it sets a dangerous precedent for Google.

If they succeed and Google decides to hand over the data who knows if China won’t do the same thing? Force Google to hand over data on a dissidents pretence. Google may say that the data it’s on their US servers but China may say “hand them over or we will close your offices and shut down your business”.

The same may apply to Yahoo or Microsoft because the privacy law is not the same all over the world and Yahoo already gave information to the Chinese government regarding the dissidents without being forced to do it.