Yahoo Inc. announced its exit from China on Tuesday, citing an increasingly difficult working climate.
Many of the company’s services were already restricted by China’s digital censorship, so the move was mostly symbolic. However, the government’s recent steps to strengthen its influence over technology businesses in general, including homegrown behemoths, may have shifted the scales in Yahoo’s favor.
“In acknowledgment of China’s increasingly difficult business and legal climate,” Yahoo stated in a statement, “Yahoo’s suite of services will no longer be available from mainland China as of November 1.” It stated that it “remains dedicated to our users’ rights as well as a free and open internet.”
The decision comes at a time when the US and Chinese governments are at odds over technology and trade. The United States has imposed restrictions on Huawei and other Chinese technology companies, saying that they have links to China’s government, military, or both. China claims that the United States is unfairly stifling competition and attempting to stifle China’s technical advancement.
Yahoo is the most recent foreign IT firm to leave China. Google gave up some years ago, and Microsoft’s professional networking platform LinkedIn said this month that its Chinese site will be shut down and replaced with a jobs board. The departures highlight the challenges that internet businesses confront in a vast potential market when the government forces them to block politically sensitive or improper content and terms.
Chinese corporations have stepped in to fill the hole, building an alternate internet with its own digital behemoths. WeChat and Weibo are the most popular social media platforms in China, and the Baidu search engine has essentially overtaken Yahoo and Google.
Yahoo’s exit coincided with the passage of China’s Personal Information Protection Law, which places restrictions on what information organizations may collect and establishes storage requirements.
Chinese rules also require corporations operating in the nation to pass over data when requested by authorities, making it harder for Western companies to do business in China because they may face domestic criticism if they comply with China’s demands.
In 2007, legislators in the United States slammed Yahoo for handing over data on two Chinese dissidents to Beijing, which led to their detention.
Yahoo has already scaled back its activities in China, shuttering its Beijing headquarters in 2015 and discontinuing a music and email service in the early 2010s. Anyone trying to visit Engadget China, a tech news site it had continued to run, was met with a popup on Tuesday stating that the site would no longer produce material.
Most foreign social networking sites and search engines, such as Facebook and Google, have also been blocked in China. Some Chinese users get around the restriction by utilizing a virtual private network (VPN), which hides your identity and the location from which you connect in.
In 2017, Verizon Communications Inc. bought Yahoo and combined it with AOL, but then sold the company for $5 billion to private equity firm Apollo Global Management. In September, Apollo announced that it had completed its acquisition of Yahoo.