for Chinese regulators, Even the censored social network in the US was too much.
Microsoft said Thursday that it will stop operating its work-oriented social network LinkedIn in China by the end of the year. In a statement, the company noted “a significantly more challenging operating environment and greater compliance requirements in China.”
The announcement is a symbolic moment for the US-China tech relationship, and for China’s new hard-line approach to regulating the tech industry. Microsoft’s withdrawal is the most notable departure since Google left the country in 2010 in protest of alleged censorship and espionage.
LinkedIn entered China in 2014 after agreeing to censor content on its site for misinformation and politically sensitive topics, such as Taiwan. Microsoft, which has had a relatively long and strong relationship with Chinese authorities, acquired LinkedIn in 2016. In recent years, it has been the only major US Internet company offering content within China. LinkedIn says it will operate a China-only job board within the country, effectively removing social networking and content-sharing jobs from the site.
The exit highlights the pressure on American companies as US-China relations deteriorate and the Chinese government deepens its influence over the economy. Says Nina Chiang, financial analyst and author of Technology war between the United States and China, a book on high-tech competition and cooperation between the world’s two largest economies.
“LinkedIn is about the last remaining big US tech company operating in China with content,” says Chiang. And with his disappearance, the separation between China and the rest of the world will deepen.
LinkedIn’s announcement comes after months of intense Chinese government pressure on its tech industry, with sweeping crackdowns and harsh new rules. To a large extent, this includes a plan to go into effect later this year to examine and regulate the recommendation algorithms. This will cover the algorithms LinkedIn uses to suggest content as well as potential new business connections to users.
Microsoft has a long history of operating successfully within the technology industry in China. The company established an important research lab, Microsoft Research Asia, in Beijing in 1998. There trained researchers can be found all over the technology world in China.
In 2012, members of the lab teamed up with Jeff Hinton, a pioneer of modern artificial intelligence, using a technology known as deep learning for speech recognition. The lab will continue to display a system that translates between English and Mandarin in real time using technology. Its adoption of AI has helped form a number of Chinese AI companies.
Microsoft will continue to operate its censored search engine, Bing, in China, even though it accounts for less than 4 percent of the country’s search market, according to MarketMeChina.
Pressure on LinkedIn has been mounting for months. In March, corporate executives in China were reported to have been reprimanded by the government for failing to control political content shared on the platform, despite censorship. It’s not clear what prompted the action, but the company was reportedly asked to do a “self-assessment”, stop registering new users, and report to the China Cyberspace Administration within 30 days.
In August, the company again said it was temporarily halting new member registrations via the LinkedIn app “to ensure we comply with local law,” without elaborating. In September, the company expanded its oversight by We say to some foreign journalists That their profiles with China will be blocked
Until LinkedIn announced that leaving China was apparently censored, with references to “freedom of information” and “Chinese government requirements” removed from the version published within China.
Chinese internet companies are also facing new challenges as the government imposes stricter antitrust rules and regulations on the use of data and algorithms.