I think there lies a weekness in the logic if hosting country is considered as a parameter to rank site in the result page.
Say my site is hosted in uk , while my competitors are in my country. But as quality their site are below than mine. Due to the factor mine will not be listed in the result as its hosted outside
The whole purpose is to return the best site always. In that case i think for some way they should consider business address given in host or domain would be better to consider.
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