Yahoo exits China amid ‘challenging business environment’


American web services provider Yahoo said it has ended its presence in mainland China “in recognition of the increasingly challenging business and legal environment”, as Beijing government imposed tougher regulations.

Yahoo is the second Western tech brand to quit the country in recent weeks while Chinese authorities are in the midst of a large-scale crackdown on big tech companies – both those from the US and its own native giants.

In a statement, it says: “Yahoo remains committed to the rights of our users and a free and open internet. We thank our users for their support.”

Yahoo users in China are now greeted with a message saying its sites are no longer accessible while its products and services remain unaffected elsewhere around the world.

Yahoo’s move follows closely behind Microsoft’s announcement last month that it was removing LinkedIn – its business-focused social network – from China, something it also blamed on “a significantly more challenging operating environment and greater compliance requirements”.

Some Western tech firms have been criticised for having links to China, or for storing user data there.

Even Chinese firms are suffering the effects of a broader tech crackdown, part of a five-year plan from the state to regulate its economy.

Bitcoin mining has been devastated by a blanket ban on the trading of crypto-currencies, while Alibaba was handed a record US$2.8bn (£2bn) fine earlier this year.

And the crackdown extends to gaming, too – which officials have likened to digital drugs – while introducing rules that severely limit children’s use of online games.

Once a rival to Google as the search engine of choice in the early days of the internet, Yahoo has seen its fortunes dip over the past two decades.

Today, it still provides web portal services – a landing page with a range of news, alongside email and search functions. But it has been eclipsed by Google and newer giants, such as Facebook and Twitter.

It also owns a number of media brands, such as technology news sites Engadget and TechCrunch, which are also no longer accessible in China.

A range of laws passed in recent years contributes to what Yahoo and others characterise as a “challenging” market.

The Personal Information Protection Law – or PIPL – which came into effect on Nov 01, is one of them.

Designed as a Chinese data-protection law, it introduces a range of regulations about how data can be collected and stored, with the threat of potentially massive fines of up to 5% of a company’s annual turnover.

Foreign entities processing user information – such as through web cookies and services – must have a presence, or appoint a representative on the Chinese mainland, responsible for enforcement.

In some ways, it is not dissimilar from privacy-focused laws, such as GDPR in Europe. But the political environment is significantly different in China from that in many western nations, with strict censorship requirements. (Source: BBC)