Yahoo Inc. has pulled out its services from China. The company cited ‘increasingly challenging business and legal environment’ as the reason for this move. This move was symbolic, as some services like the web portal from Yahoo were already blocked in the country.
Chinese Officials are extremely firm when it comes to internet censorship. Any company operating in the country is required to censor keywords and information that is politically inappropriate or sensitive. A statement from the company read that Yahoo’s service suite will become inaccessible from the 1st of November from mainland China.
Many multinational companies from different parts of the world have been facing these hurdles as a result of the closed borders policies from China. Yahoo users started receiving the prompts in October, stating that the services would soon be shut off. The newly set rules and restrictions have added uncertainty and increased the compliance costs to operate in China.
Yahoo, in its statement, said that the company always commits to the users’ rights and open internet. Surprisingly, this move coincided with China’s implementation of its Personal Information Protection Law. As per the law, the officials have set a limit to the information that can be collected by the companies. It also sets certain standards for how the information would be stored.
Some Chinese laws also stipulated the companies operating there to present the required data as needed by the authorities. This led to tension among several companies from the West, owing to the pressure for leaning towards China’s demands.
Meanwhile, China has already blocked various international platforms, including search engines like Google and social media websites like Facebook. However, some Chinese nationals circumvent this restriction by using virtual private networks.
Yahoo was acquired by Verizon Communications Inc. back in 2017. The company merged Yahoo with AOL. However, this entity was later sold to Apollo Global Management, a private equity firm, for $5 billion. Back in September, Apollo announced in September that Yahoo’s acquisition by the company was complete.
Back in 2007, Yahoo was lambasted in the US by lawmakers for a similar incident. The company handed over data to Beijing. The data was related to two Chinese dissidents and later led to their imprisonment. Previously, the company limited its operations in China. Back in 2015, the company also shut off its office in Beijing. Furthermore, Yahoo also provided an email and music service in China. However, the authorities stopped both the services soon.
The company happens to be the second-largest U.S-based technology firm to limit its operations recently. In the previous month, Microsoft Inc. stated that it would shut off its professional networking service, LinkedIn, and would replace it with a jobs board.
Experts opinioned that such companies are trying to pull the services off instead of dealing with the constant business risks and uncertainties. Giant companies like Apple and Tesla sought to comply with Chinese rules of localizing the data by building data centers in the country for storing Chinese data exclusively.