Yahoo to no longer operate in China, third tech giant to do so in past month

Amid the raging tech crackdown which had taken several companies into its grip across the country, tech firm Yahoo has said that it will no longer operate in China, becoming the third tech giant to do so in the past month. This comes amid aggressive efforts to tighten data and privacy regulations by the Communist Party-led government in the nation.

Following LinkedIn and Epic Games

In a statement, the company has said that starting November 1, Yahoo’s suite of products will cease to be functional in mainland China, owing to the “business and legal environment” in the country becoming more complex. However, the tech giant has been downsizing its operations on Chinese grounds for years, and had stopped offering its news and mail services as early as 2013.

Image Credits: Epic Games

Interestingly, this makes Yahoo the third major US-based tech platform to bow out of China in the past month alone, following in the footsteps of LinkedIn as it made its exit on October 14, and Epic Games’ November 1 announcement that it will no longer be testing a Chinese version of its popular game Fortnite. The reason? The extended tech crackdown that has shaken up the entire industry and proven to be problematic for companies both from China and from outside.

The Latest Law to Curb the Power of Tech Firms

The latest measure taken by the Xi Jinping-led government has been the enforcement of the Personal Information and Protection Law this week, through which the Communist Party hopes to tighten privacy regulations across the country, by providing a legislative framework to regulate the way in which companies collect personal and biometric data from their users.

The new law is expected to have a major effect on the technology sector, with companies that fail to comply standing the risk of being fined up to 5 percent of their previous year’s turnover. And that’s not all, since the legislation also states that data processing activities that take place outside China will also fall in the country’s jurisdiction.

These steps, experts believe, have created a scenario of extreme volatility and uncertainty for tech firms operating in the country, making it unfeasible for many to continue being functional. Add to this the fact that Yahoo has already been facing a decline in its user base over the years, making it even more difficult for the purple-bannered firm to operate amid  the growing scrutiny and stricter regulations surrounding its very functioning.