Yahoo Inc., owned by Apollo Global Management, a private equity firm, announced its decision to quit offering its services in China starting yesterday, November 1. The technology company cited China’s abusive relationship with technology companies and the new crackdowns in Beijing as the reasoning behind the decision.
“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,” a company spokesperson said in a statement.
REPORT: @Yahoo Has Pulled Out of #China, Ending Tumultuous Two-Decade Relationship. It Is The Second Well-Known U.S. Tech Firm To Downsize China Operations In Less Than A Month. https://t.co/nYN1gDNoop
— John Basham 🇺🇲 (@JohnBasham) November 2, 2021
The Wall Street Journal reported that Yahoo Inc is the second company to end its business relationships in China this year. Microsoft’s LinkedIn site also pulled its platform off the digital shelves. The WSJ reported that “Yahoo’s pullout coincided with the implementation of China’s Personal Information Protection Law.”
However, Yahoo Inc. did not cite the specific law in any of its public statements regarding the business decision. The law, which went into effect on Monday, November 1, essentially creates a massive data protection legal regime in the country, and companies that break it can face millions of dollars in fines, depending on the severity of the violation it could cost up to 5% of the company’s yearly revenue.
PIPL has “an extraterritorial aspect to it,” JoHannah Harrington, chief legal officer at tech firm Elements Global Services, told Axios reporter Bethany Allen-Ebrahimian. The law will apply to companies outside of China that process data related to products and services provided in China or that “analyze or assess behavior of individuals in China.”
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