Niklas Zennstrom told the Financial Times that Tom Online, the Chinese internet portal that runs the joint venture with Skype, censors text messages containing words like Falun Gong and Dalai Lama, which he insisted was done in compliance with local law. In the interview Zennstrom confirmed that Tom Online had implemented a text filter, which is what everyone else in that market is doing. Those are the regulations.

The Falun Gong is a spiritual movement that has been banned in China since 1999. The recent visit of the Chinese President Hu Jintao to the United States has prompted protests by its US members, who allege that the Chinese government is killing Falun Gong followers in a Nazi-style concentration camp in Liaoning province and harvesting their organs.

The Dalai Lama was forced to flee Tibet in 1959 after China invaded his homeland. He has won the Nobel Peace Prize and continues to oppose the Chinese occupation of his country.

Zennstrom claimed that compliance with Chinese censorship was no different from obeying rules governing business in western countries. He insisted that the actions of Tom Online and Skype had not put users at risk.

Skype is not the only western country working with China’s censorship rules. Microsoft Corp and Google Inc have been criticized for implementing the laws. Yahoo in particular has been slated for providing information that recently helped Chinese authorities jail two dissidents.

Unfortunately for Skype, China is not a market it can ignore because it is one of its biggest, along with Germany and the United States. Skype said it has more than 80 million users in total worldwide, with 250,000 new users being added per day.