The following paragraph appears in Google AppEngine’s terms of service (emphasis mine):
2.2. Your use of the Service must comply with all applicable laws, regulations and ordinances, including any laws regarding the export of data or software. You agree not to use the Service in the design, development, production, or use of missiles or the design, development, production, stockpiling, or use of chemical or biological weapons. You agree not to use the XMPP API to operate or to enable any telecommunications service or in connection with any applications that allow users to place calls to or receive calls from any public switched telephone network.
So if I develop an app that may hurt the profits of incumbent telcos I’m on the same level as Saddam Hussein? Actually, I’m probably a worse person – he didn’t have WMDs after all. (Well technically he did, just not in the second Iraq war). Better watch out what apps you develop, or a Tomahawk cruise missile could find its way to your home office…
Note: Don’t get me wrong – I love app engine. What I don’t like is lawyers gone mad. At the very least they could have separate those prohibitions into different subsections.