Yahoo has announced that it will exit China due to an increasingly challenging operating environment.
China is notorious for its draconian internet controls, and many of Yahoo’s services were already blocked by the infamous ‘Great Firewall’. While its exit from the market is therefore perhaps more of a gesture, in recent months China has moved to tighten its grip over tech companies – including domestic firms – with the implementation of the Personal Information Protection Law, which outlines the information that may be gathered by tech companies and regulates how they are able to store this data.
This likely catalysed Yahoo’s decision, as the firm has fallen foul of Chinese legislation in the past. Companies that choose to operate in China are required by law to hand over data to the authorities on request, and in 2007 Yahoo obliged, supplying information on two dissidents which led to their arrest. The US firm received strong criticism by US lawmakers for this acquiescence, despite its hands being effectively tied by Chinese law.
In a statement, Yahoo said: “In recognition of the increasingly challenging business and legal environment in China, Yahoo’s suite of services will no longer be accessible from mainland China as of November 1”, adding that the firm “remains committed to the rights of our users and a free and open internet.”
Yahoo is not the first US-based firm to exit the Chinese market; Google abandoned China several years ago, while last month Microsoft-owned LinkedIn announced that it would scrap its Chinese website in favour of a jobs bulletin. Yahoo’s move is the latest signifier that western firms are unwilling to comply with the strict political censorship enforced by the Chinese Communist Party, even if this precludes them from the vast audience offered by the market.
Chinese firms have stepped in to provide alternative services, with Baidu largely assuming the functions of Yahoo and Google as China’s most prominent search engine, Weibo acting as an analogue for Twitter and WeChat providing a similar offering to WhatsApp.