For Chinese regulators, Even a censored US-based social network was too much.
Microsoft said on Thursday that it would close its operational social network LinkedIn in China by the end of the year. In a statement, the company noted “significantly more challenging operating environments and the need for greater compliance in China.”
The announcement is a symbolic moment for US-China technology relations, and for China’s new radical approach to controlling its technology industry. The withdrawal of Microsoft is the most high-profile exit since Google left the country in 2010 in protest of censorship and alleged espionage.
LinkedIn entered China in 2014 after it agreed to censor content on its site for misinformation and politically sensitive issues like Taiwan. Microsoft, which had its own long and relatively close relationship with Chinese authorities, acquired LinkedIn at 201 Link. In recent years, it has become the only major U.S. Internet company providing content in China. LinkedIn says it will operate a China-only job board within the country, effectively removing the site’s social networking and content sharing functionality.
The exit puts pressure on American companies as U.S.-China relations deteriorate and the Chinese government deepens its impact on the economy. “China’s tight control is becoming less and less common for Western companies,” said Nina Jiang, a financial analyst and author. US-China tech war, A book on high-tech competition and collaboration between the world’s two largest economies.
“LinkedIn is the last remaining large American technology company to operate in China that is involved in content,” Jiang said. “As it leaves, the divide between China and the rest of the world will deepen.”
The LinkedIn announcement comes just months after the Chinese government stepped up pressure on its technology industry, with harsh crackdowns and stringent new rules. Notably, this includes plans to test and control the recommended algorithm to be implemented later this year. This will cover the algorithm that LinkedIn uses to suggest new potential business connection content to users.
Microsoft has a long history of successful management in the Chinese technology industry. The company established a notable research lab in 1998 in Beijing called Microsoft Research Asia. Researchers trained there will be found in the Chinese technology world.
In 2012, members of the laboratory collaborated with Geoff Hinton, a pioneer of modern artificial intelligence, using a technique known as deep learning for speech recognition. The lab will showcase a system that uses technology to translate between English and Mandarin in real time. Its AI adoption has helped seed a number of Chinese AI companies.
Microsoft will continue to operate its censored search engine, Bing, in China, even though it is less than one percent of the country’s search market.
The pressure on LinkedIn has been rising for months. In March, company executives in China were reportedly reprimanded by the government for failing to control political content shared on the platform despite censorship. It is unknown at this time what he will do after leaving the post.
In August the company again stated that it was discontinuing new member sign-ups through the LinkedIn app “to ensure we comply with local laws” and in September the company further expanded its censorship. Telling some foreign journalists Their profile with China will be blocked
Chinese internet companies are also facing new challenges as the government imposes strict no-confidence rules and regulations around the use of data and algorithms.
Under government pressure, Ant Group, one of Alibaba’s financial services behind the widely used Alipay app, canceled multi-billion dollar IPO plans in Hong Kong and Shanghai last November. The company has since been instructed to break up its business and adapt its mobile app to its fierce competitor Tencent.
In April, Ant’s parent company Alibaba was fined a record 8 2.8 billion by regulators for breach of trust related to its ecommerce business.
In August, ride-hailing company DID was reprimanded for moving ahead with its own IPO, despite concerns from China’s Internet regulator about data privacy. The company’s app has been removed from the Chinese App Store, and it has been re-verified on its data practice.