As Yahoo leaves China, an accelerating stream of exits

Regulatory, cultural changes widen China’s international digital divide

TechCrunch held events in China as recently as 2019, following several years of hosting conferences in the country’s hardware capital, Shenzhen. In the wake of today’s news, is no longer available for regular access in China.

How quickly things change.

This morning, global media noted weekend news that Yahoo, TechCrunch’s parent company, is pulling its remaining services from China. The move follows decisions by other major American companies to also end certain operations from China, including Microsoft and Epic Games.

According to an official Yahoo statement, due to an “increasingly challenging business and legal environment in China, Yahoo’s suite of services will no longer be accessible from mainland China” as of the start of the month. The news was first disclosed over the weekend, albeit to muted note and coverage.

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

Yahoo added in the same comment that it “remains committed to the rights of our users including a free and open internet” — about as direct a dig against the Chinese government that you will find from a corporation that operates globally.

The recent decisions to limit or end the availability of certain international products in China’s mainland area follows a deluge of regulatory changes aimed at curbing the power of domestic technology companies, changes to rules regarding media and more. The revamps include changes to video game access for youths, the culture of celebrity fan clubs and for-profit educational products aimed at students not yet in university.

In recent quarters, the Chinese market has seen its openings narrow. Films that might have found a release window in the country are failing to make it to market, for example. The context for Yahoo’s decision to leave the country, then, is both broad and deep.

China’s “increasingly challenging business and legal environment”

There’s plenty to choose from when trying to identify what created an “increasingly challenging business and legal environment” for Yahoo. But the fact that it’s closing the curtains this month points at a blatant culprit: the Personal Information Protection Law of the People’s Republic of China (PIPL), which came into effect on November 1.

While it makes sense to compare the PIPL to the EU’s General Data Protection Regulation (GDPR) in terms of what it takes for foreign companies to comply, the comparison only goes so far. Indeed, storing data in the country or having to “pass a security assessment organized by the national cybersecurity authority” before transferring information across borders doesn’t have the same implications when the country in question is China.

Add in the broader flurry of regulatory changes, and it is not hard to see why Epic Games is pulling the plug on Fortnite in China, or why Microsoft earlier announced it was pulling LinkedIn from the Chinese market. In a blog post, the professional network was described as “facing a significantly more challenging operating environment and greater compliance requirements in China” — wording that echoes Yahoo’s statement this weekend.