Google says China-based cyber spies struck the internet giant and at least 20 other firms to track activities of activists around the world.
Google says it will no longer filter internet search engine results in China and the online espionage has it reconsidering its business operations there.
“These attacks and the surveillance they have uncovered, combined with the attempts over the past year to further limit free speech on the web, have led us to conclude that we should review the feasibility of our business operations in China,” Google chief legal officer David Drummond said in a blog post.
“We have decided we are no longer willing to continue censoring our results on Google.cn.
“Over the next few weeks we will be discussing with the Chinese Government the basis on which we could operate an unfiltered search engine within the law, if at all.”
Mr Drummond said Google realises that defying Chinese Government demands regarding filtering internet search engine results may mean having to shut down its operations in China.
Google said it detected a highly sophisticated and targeted attack on its corporate infrastructure in mid-December that resulted in the theft of intellectual property.
Mr Drummond says evidence indicated the attackers were trying to get access to email accounts of Chinese human rights activists.
Google believes the attack was mostly blocked and that only minor information, like creation dates and subject lines, were stolen from two accounts.
Google says its investigation revealed accounts of dozens of China human rights activists that use Gmail in Europe, China, or the United States have been “routinely accessed” using malware sneaked onto their computers.
Google says at least 20 other large companies including finance, internet, media, technology, and chemical businesses were similarly attacked.
“We are currently in the process of notifying those companies, and we are also working with the relevant US authorities,” Mr Drummond said.