Yahoo! shuts! down! last! China! operations! as! doing! business! becomes! 'increasingly challenging'!


Yahoo! has confirmed it is quitting China due to the "increasingly challenging" business and legal environment just as the country's new Personal Information Protection Law (PIPL) comes into effect.

Starting November 1, 2021, global companies doing business in the country must comply with PIPL, which regulates the storage of data and sets a stringent framework for user "privacy" within China.

As we've reported previously, the new law encourages netizens to point out perceived "uncivilized" cyber activity through improved reporting tools to alert the Chinese authorities, and – among other fresh legislation including proposed rules on cross-border data transfer – it adds a regulatory and compliance risk that companies have little appetite for.

As new regulations on Big Tech pile up in the mainland – including against data protection, monopolization, and more – local firms have also fallen afoul of the rules.

According to Yahoo!'s statement, it stopped allowing users to access its (few remaining) services from mainland China yesterday. Yahoo's search engine has long been blocked by China's Great Firewall. Yahoo! China closed its email service on 19 August 2013 – with Alibaba managing the migration of the China Mail accounts as part of the pair's lucrative 2012 deal, under which Alibaba ran the China brand in a tech and IP cross-licensing deal.

We've asked the firm for comment.

A spokesperson told Reuters today: "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. Yahoo remains committed to the rights of our users and a free and open internet. We thank our users for their support."

The move comes after Microsoft pulled LinkedIn from China last month, also citing "a significantly more challenging operating environment and greater compliance requirements in China."

Other former Verizon-owned entities, including Engadget China, were also unavailable at the time of writing. Verizon originally bought AOL in 2015 for $4.4bn, and it also got TechCrunch, Engadget, and HuffPost in the bundle. Two years and another $4.8bn later, Yahoo! joined its media unit. Yahoo - teased mercilessly for years by The Reg for the exclamation points in its brand guidelines - was gifted with italicization in 2019 by its new telecoms giant owner and shoved into a unit with AOL which it dubbed Oath.

Verizon sold the AOL and Yahoo! unit in May this year to private equity outfit Apollo Global Management, which gave Yahoo! its name back but unsportingly removed the exclamation point. Never ones to give up a repetitively bad joke (it's funnier when you're angry), The Reg pressed on with our headlines.

Engadget China – which was also sold to Apollo as part of the Verizon media unit – at the time of writing displayed the message: "As of November 1st, 2021 Engadget China will no longer be publishing content." We understand the publishers will still run a Chinese-language version of the site.

As many have pointed out today, Yahoo!'s Beijing Office was closed in 2015, and only a few China-facing sites were operating as of last week, so the move does not represent a large strategic shift. Nonetheless it is the end! of! an! era!

Dr Martin Thorley, from the University of Exeter, said of today's move:

“Yahoo is not the first to withdraw from China in response to increasing demands of the sector from the Chinese Communist Party. It won't be the last. All those who enter the Chinese market must know that in doing so, they are making a deal. In return for access, they play by the Party's rules - a significant concession where the CCP operates a rule-by-law system, rather than rule-of-law.

“Things will get more complicated when increasing demands are made in other sectors, of companies with massive investments on the ground. Yahoo was already running reduced operations in China, but what if your company has motor vehicle assembly plants in the country, or theme parks? In the long run, we will find out just how far commercial entities are willing to go in order to maximise shareholder value, but we might not like the answer.” ®

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