I think the difference here is that the research may have shown that Google was unintentionally breaking the law, and after Google realized this, they used an e

I think the difference here is that the research may have shown that Google was unintentionally breaking the law, and after Google realized this, they used an existing review process in a way they don't normally use it to block publication. The possibly shady part is that they could be suppressing evidence that they broke the law, but, like your said, they can decide how to run their own business. I'm not even sure if the researcher would be a whistleblower if they didn't intend to report something illegal. To makes matters worse, in this case at least, the law or laws they may be breaking were established to protect a class of people the researcher is a member of.