As China continues to crack down on tech companies, many of them have begun to take decisions as severe as pulling out of the Chinese market. Microsoft has announced that it will pull out its professional social network LinkedIn from the Chinese market before the year’s end.
The decision follows a number of regulatory changes and actions from regulators in the country which have put tech companies, both local and foreign, in tight spots. The decision to pull out LinkedIn from the Chinese market also follows about two weeks after Microsoft came under regulators’ watch for deciding to block the profiles of some U.S. journalists in China.
Launched on May 5th 2003, LinkedIn is a business and employment platform that creates a space for professionals across industry to engage with one another, share their CVs, post jobs, etc., basically professional networking. In 2016, LinkedIn was acquired by Microsoft for about $26 billion and as of September 2021, LinkedIn has more than 774 million registered members from over 200 countries and territories.
Tech companies in China are having quite a hard time. These companies, both local and foreign, continue to face regulatory decisions that are making them to have a rethink. This is because the demands of the government may not go in line with their mode of operations and company policies. In the case of Microsoft, the company had to choose between following the directives of the Chinese government or pulling the service out of the country. The company chose to walk.
A LinkedIn blog post discussing the news spoke about when the company moved into the Chinese market in 2014. The platform said it was aware that deciding to enter into the Chinese market automatically translated to “adherence to requirements of the Chinese government on internet platforms”. LinkedIn, however, said that currently the reality is that it is “facing a significantly more challenging operating environment and greater compliance requirements in China”, and that this has triggered its “decision to sunset the current localized version of LinkedIn, which is how people in China access LinkedIn’s global social media platform, later this year”.
Apart from the crackdown on tech companies, Chinese regulators are also out to bring an end to cryptocurrency operations in the country and have declared cryptocurrencies as illegal in the country. The decision has also pushed Bitcoin miners and cryptocurrency establishments out of the country and new statistics show that the US is now the top destination for Bitcoin miners.
