LinkedIn’s Exit From China Cuts Another East-West Bridge

For Chinese regulators, even a censored US -based social network is excessive.

Microsoft Said on Thursday it will stop running the work -based social network LinkedIn in the interior China at the end of the year. In a statement, the company cited a “more challenging operating environment and more compliance requirements in China.”

The announcement is a symbolic time for U.S.-China tech relations, and for China’s new tough approach to regulating its tech. Microsoft’s retreat is an even taller departure from Google left the country in 2010 in protest of censorship and alleged intelligence.

LinkedIn entered China in 2014 after agreeing to censor the content of its site for misinformation and politically sensitive topics, such as Taiwan. Microsoft, which has its own long and relatively strong relationship with Chinese authorities, acquired LinkedIn in 2016. In recent years, it has been the only U.S. internet company to offer content management. China. LinkedIn said it will run a board of jobs only in China within the country, effectively taking away the functionality of social networking and content sharing on the site.

The exit highlighted pressure on American companies as U.S.-China relations deteriorated and the Chinese government’s influence deepened the economy. “China’s tightening restrictions are becoming more and more unmanageable for Western companies,” said Nina Xiang, a financial analyst and author of US-China Technology War, a book on high-tech competition and cooperation between the two largest economies in the world.

“LinkedIn is about the last remaining large American tech firm operating in China with a related content,” Xiang said. “Without it, the connection between China and the rest of the world will only deepen.”

The LinkedIn announcement followed months of intensified Chinese government pressure on the technology industry, with more stringent discretion and harsh new rules. Importantly, it includes a plan to start later this year to analyze and control algorithm recommendations. This will cover the algorithms LinkedIn uses to suggest content as well as new potential business connections to users.

Microsoft has a long history of operating successfully within the Chinese technology industry. The company established an important research lab, Microsoft Research Asia, in Beijing in 1998. Researchers trained there can be found throughout the tech world in China.

In 2012, lab members teamed up with Geoff Hinton, a pioneer of modern artificial intelligence, using a technique known as deep learning for language recognition. The lab will continue shows a system that translates between English and Mandarin in real time using technology. The adoption of AI has helped seed many Chinese AI companies.

Microsoft will continue to run its censored search engine, Bing, in China, even if it accounts for less than 4 percent of the country’s search market, according to MarketMeChina.

The pressure has been mounting on LinkedIn for months. In March, Chinese company executives reportedly reprimanded the government for failing to curb the political content shared on the platform, even with censorship. It was not immediately clear what prompted the action, but the company reportedly had to conduct a “self-evaluation,” stop signing new users, and report to China’s Cyberspace Administration within 30 days. .

In August the company again said that stopping new member sign-ups through the LinkedIn app “to ensure we continue to comply with local law,” without elaborating. And in September the company expanded its censorship by spoke to some foreign reporters that their profiles will be blocked in China

Chinese internet companies, too, face new challenges as the government enforces more stringent antitrust rules and regulations regarding the use of data and algorithms.

Under government pressure, Ant Group, a financial services spinout on Alibaba behind the much-used Alipay app, plans for a multi-billion-dollar IPO in Hong Kong and Shanghai were scrapped in November. The company has been ordered to scrap its business and make its mobile app compatible with its fiercest competitor, Tencent.

In April, Ant’s parent company Alibaba fined a record $ 2.8 billion by regulators for antitrust violations related to the ecommerce business.

In August, the company that rode DiDi was reprimanded for pursuing its own IPO despite concerns from China’s internet regulator about data privacy. The company’s app was taken from Chinese app stores, and it was subjected to a new review of its data works.

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