Yahoo pulls out of China over “challenging” business conditions

Yahoo has become the latest foreign tech company that withdraws from the Chinese market, alleging the quit was due to an “increasingly challenging business and legal environment” in the host country, as cited in AP News.

In the statement, the company also said, “Yahoo’s suite of services will no longer be accessible from mainland China as of November 1”, a very abrupt end to their foothold within the Chinese market.

The withdrawal of Yahoo came just weeks after Microsoft’s LinkedIn’s announcement of shutting down its services in China, with the same reasons cited around business and legal concerns, but it is interesting to note that minimal specific details were disclosed.

Yahoo’s retreat also coincides with the implementation of China’s Personal Information Protection Law, which just took effect on 1 November. The new law is China’s first “comprehensive” legislation that tightens scrutiny of outbound data transfers, which is deemed to have impacted many foreign companies operating in China, as well as the cause of these disengagements.

Due to the new data protection law, and the issues mentioned above, international companies have been stifled in their business within China causing this exodus from the country.

The tech firm had already shut down part of its services in China between 2012 and 2013, included in these were Yahoo news, mail, and its music services. The firm’s operations had also scaled back in 2015, with its office in Beijing being shut and the products affected this time included and news outlets like TechCrunch, as reported by the Guardian.

As the Chinese authority appears to maintain a firm grip over Internet censorship, international companies are facing increasing pressure. Some have been informing their users of updates in their services in recent months, as a response to Beijing’s demands, without losing the lucrative market.

Overall, these changes have resulted in international brands having to remove their operations from China, losing a source of business and income. With China pushing these new data protection laws, it will be interesting to see if further companies leave China in the near future and what result this may have upon the economy.

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