Why Yahoo cut service in China as data laws tighten

Hong Kong

Yahoo Inc. said on Tuesday it had pulled out of China, citing an increasingly difficult operating environment.

The withdrawal was largely symbolic, as many parts of the company were already blocked by Chinese digital censorship. But recent moves by the government to expand its control over tech companies in general, including its domestic giants, may have tipped the scales for Yahoo.

“Given the increasingly difficult business and legal environment in China, Yahoo’s suite of services will no longer be accessible from mainland China as of November 1,” the company said in a statement. He said he “remains committed to the rights of our users and to a free and open Internet”.

The company’s decision comes as the US and Chinese governments fight over technology and commerce. The United States has placed restrictions on telecommunications giant Huawei and other Chinese tech companies, alleging they have ties to the Chinese government, the military, or both. China claims the United States is unfairly suppressing competition and trying to block China’s technological rise.

Yahoo is the latest foreign tech company to leave China. Google gave up several years ago, and Microsoft’s professional networking platform, LinkedIn, announced last month that it would be shutting down its Chinese site, replacing it with a job board instead. The departures illustrate the choices internet companies face in a huge potential market, but where the government is forcing them to censor content and keywords deemed politically sensitive or inappropriate.

In their place, Chinese companies have filled the void, creating an alternative Internet with its own digital giants. The Baidu search engine has largely replaced Yahoo and Google in China, and WeChat and Weibo are the main social media platforms.

Yahoo’s departure coincided with the implementation of China’s Personal Information Protection Act, which limits what information businesses can collect and sets standards for how it should be stored.

Chinese laws also state that companies operating in the country must transmit data when requested by authorities, making it difficult for Western companies to operate in China as they may also face pressure in their country to give in to the authorities. requests from China.

Yahoo was harshly criticized by US lawmakers in 2007 after delivering data on two Chinese dissidents in Beijing, which ultimately led to their jail time.

Yahoo had previously scaled back its operations in China, abandoning a music and messaging service in the early 2010s and closing its Beijing office in 2015. Anyone trying to access Engadget China, a tech news site it had continued to operate, was greeted Tuesday with a pop-up stating that the site would no longer be posting content.

China has also blocked most international social media sites and search engines, such as Facebook and Google. Some users in China bypass the block by using a virtual private network (VPN) that masks who you are and where you are connecting from.

Verizon Communications Inc. acquired Yahoo in 2017 and merged it with AOL, but then sold the entity to private equity firm Apollo Global Management in a $ 5 billion deal. Apollo announced in September the completion of its acquisition of Yahoo.

This story was reported by The Associated Press.