As Yahoo Leaves China, an Accelerating Stream of Exits

Following several years of conducting conferences in the country’s hardware hub, Shenzhen, TechCrunch conducted events in China as recently as 2019. TechCrunch.com is no longer available for regular access in China because of today’s announcement. Things change so swiftly. The news that Yahoo, TechCrunch’s parent firm, is removing its remaining services from China was widely reported this morning. Other large American firms, such as Microsoft and Epic Games, have made similar choices to discontinue operations in China.

Yahoo’s suite of services will no longer is available from mainland China as of the beginning of the month, according to an official Yahoo statement, owing to an “increasingly complex commercial and regulatory climate in China.” The revelation was initially revealed over the weekend, however with little fanfare and media. While that kind of commitment to knowing the customer was appealing, it came at a price.

In the same message, Yahoo stated that it “remains dedicated to our users’ rights, including a free and open internet,” which is about as direct a jab at the Chinese government, as you will find from a multinational firm. The latest measures to restrict or eliminate the sale of some overseas products in China’s mainland region come after a flurry of legislative reforms aimed at limiting the dominance of domestic technology businesses, as well as adjustments to media laws. Developments to teenage video game access, celebrity fan club culture, and for-profit educational items geared at kids not yet in university are among the changes.

As Yahoo Leaves China, an Accelerating Stream of Exits

The Chinese market’s opportunities have shrunk in recent quarters. Films that may have found a release window in the nation, for example, are not making it to the market. As a result, the backdrop around Yahoo’s decision to leave the nation is both wide and deep. When it comes to determining what caused Yahoo to face an “increasingly tough commercial and legal climate,” there are several options. However, the fact that it is ending this month points to a clear culprit: the People’s Republic of China’s Personal Information Protection Law (PIPL), which went into force on November 1.

While comparing the PIPL to the EU’s General Data Protection Regulation (GDPR) in terms of what international enterprises must do to comply makes sense, the similarity only goes so far. Indeed, when the country in question is China, keeping data in the country or needing to “pass a security assessment established by the national cybersecurity authority” before transmitting information across borders has different ramifications. 

When you consider the larger slew of legislative changes, it is easy to see why Epic Games is pulling the plug on Fortnite in China, or why Microsoft stated earlier this year that it was exiting the Chinese market. The professional network described in a blog post as “facing a much more demanding operating environment and tougher compliance requirements in China,” which is similar to Yahoo’s remark from this weekend.