Google and Yahoo could soon be facing the same kinds of ethical and strategic dilemmas in Japan that they have faced in China. A Japanese government panel convened by the Ministry of Internal Affairs and Communications recently proposed that the government regulate Web content, much like it does television and newspapers. The ruling Liberal Democratic Party wants the proposals made law by 2010.

According to Global Voices, the proposed law would prohibit “information harmful to young people” and violators could face six months in the pokey and a brisk million-yen ($10,000) fine. With a few exceptions, Japan’s online community doesn’t seem to be balking much, a fact that may have to do with the above-mentioned government control over mainstream media.

But unless Japan’s planning to build a Great Firewall of China-style barrier – or perhaps a Digital Divine Wind – the question is open as to how the country will police data coming in from outside. (The government has managed to force wireless providers to self-filter mobile content with considerable effectiveness.) Come what may, Internet companies of all stripes will have to reconsider how they approach that Japan should the proposed law go into effect.