Yahoo pulls out of China due to ‘challenging’ business, legal environment

Yahoo announced Tuesday it will become the latest American tech company to pull out of China in recent weeks. Last month, LinkedIn said it would shut down its Chinese site, replacing it with a jobs board instead.

“While we’ve found success in helping Chinese members find jobs and economic opportunity, we have not found that same level of success in the more social aspects of sharing and staying informed,” LinkedIn Senior Vice President of Engineering Mokah Shroff said in a blog post. “We’re also facing a significantly more challenging operating environment and greater compliance requirements in China.”

That last part sounded very similar to Yahoo’s statement released Tuesday.

“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,” the company said. “Yahoo remains committed to the rights of our users and a free and open internet. We thank our users for their support.”

The Yahoo withdrawal from China is largely symbolic. At least some of Yahoo’s services, including its web portal, have already been blocked. China has also blocked most international social media sites and search engines like Facebook and Google. People in China who wish to access these services have to use a virtual private network (VPN).

Companies in China have filled the void left by Facebook, Google and Yahoo, as the country creates 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 leading social media platforms in China.

The withdrawal coincided with the implementation of China’s Personal Information Protection Law. The law limits what information companies can gather and sets standards for how it must be stored.

Chinese laws also stipulate that companies operating in the country must hand over data if requested by authorities. This makes it difficult for Western firms like Yahoo to operate in China, as they may also face pressure back home to not give in to China’s demands.

In addition, Chinese authorities require companies operating in China to censor content and keywords deemed politically sensitive or inappropriate.