Yup, it's censorship allright and I think every part of this story sucks. It's a legal tragedy but I can see how it happened.

The server's in norway thus can't be touched. Google is in the states and actually takes fragments of the copyrighted material presented on the server in norway. This, actually, makes google publish copyrighted material. On the other hand, on could argue that every single line of text google ever spits out is the copyright of someone, unless the text is generated by some artificial intelligence or something other non human.

Anyway, the whole thing sucks. I wonder if google fought it at all?