Google's customers want those movies, and likely wouldn't appreciate Google cutting them off to make a point. And when attorneys general are involved, it's hardly a good time to start resorting to exactly the sort of tactics that would get them accused of abusing a monopoly. At least, not in the one country (the US) that actually has relevant jurisdiction over them. Google needs to be completely above reproach here.
(Notice that I'm not saying it'd be wrong to do so.)
Now, what Google could do without (additional) reprisal would be to have a front-page link to a page raising awareness of this issue. Run their own ads on YouTube and other Google sites. Spell it out in terms everyone can understand, with direct quotes from the most incriminating of documents about the smear campaign. Provide people with an easy way to complain to their congresscritters. See how fast the issue disappears and a new case pops up against the originators of the smear campaign.
(Notice that I'm not saying it'd be wrong to do so.)
Now, what Google could do without (additional) reprisal would be to have a front-page link to a page raising awareness of this issue. Run their own ads on YouTube and other Google sites. Spell it out in terms everyone can understand, with direct quotes from the most incriminating of documents about the smear campaign. Provide people with an easy way to complain to their congresscritters. See how fast the issue disappears and a new case pops up against the originators of the smear campaign.