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Microsoft collapses LinkedIn social media service in China

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Microsoft Corp. MSFT 1.98% LinkedIn said it would shut down a version of its professional networking site operating in China, marking the end of the last major American social media network operating openly in the United States.

LinkedIn said in a statement Thursday that it made the decision after facing a very difficult operating environment and more stringent compliance requirements in China.

Microsoft’s move takes place as the Chinese Communist Party continues its campaign to insist on the economy and Chinese society as a whole, strengthening its dominance over the largest tech companies, private sectors and online commentary.

In March, LinkedIn announced that it would temporarily suspend the registration of new members in China after confirming its compliance with local law. Around the same time, Chinese Internet regulators instructed LinkedIn officials to better regulate their content and gave them 30 days, people familiar with the matter said. In recent months, LinkedIn has informed several Chinese-focused human rights activists, scholars and journalists that their profiles have been blocked in China for containing banned content. ..

LinkedIn said it would replace Chinese services that restrict some content to comply with local government requirements with job site services that lack social media features such as the ability to share opinions and news articles. ..

Beijing once advertised the LinkedIn model as a way for global internet businesses to access the market, including a contractual relationship between headquarters and the Chinese people who actually own the platform in the country. However, such a model was by no means popular in Silicon Valley, as overseas headquarters had little control over China’s business.

Today’s automobiles provide high-tech capabilities and collect large amounts of data to train algorithms. As China tightens control of new technologies, the WSJ is focusing on the risks of Tesla and other global brands that are currently needed to retain data domestically.Screenshot: Tesla China

The exit of social media sites is the latest chapter in the struggle facing the operation of western internet companies in China, which has some of the strictest censorship rules in the world. Twitter Inc. And Facebook Inc. Platform has been blocked since 2009. Alphabet Inc. Google resigned in 2010 after refusing to censor results on search engines. Chat messenger app Signal and audio discussion app Clubhouse have also been blocked this year.

Knowledgeable Internet users in China can access these Western services using workarounds such as virtual private networks and VPNs, but many do not.

LinkedIn entered China in 2014 after making a rare concession to comply with local censorship rules. Microsoft has agreed to purchase the platform two years later. In 2014, LinkedIn boss Jeff Weiner said the company supported freedom of expression, but offering a localized version of the service in China meant complying with local censorship requirements. rice field.

In China, LinkedIn has been frequently used by Chinese exporters and businessmen to connect with foreign buyers in the hope of promoting foreign interest and sales. Many Chinese internet users, especially those working in the technology sector, tend to use a local professional networking app called Maimai, run by Beijing Taou Tianxia Technology Development Co. Ltd.

LinkedIn also faces fierce competition in the Chinese job-seeking app market with large rivals such as Zhaopin Ltd.

LinkedIn said in a statement Thursday that after seven years of business in China, it was not able to achieve the same level of success in the more social aspects of sharing and disseminating information.

Continued censorship on behalf of Chinese authorities poses a risk to LinkedIn’s reputation and global business model, said Evan Medeiros, a professor at Georgetown University who advises multinational companies on operating in China. He said these actions overturned the idea that LinkedIn would provide a platform for free and open sharing of perspectives.

White House officials said the administration welcomed the move. The Chinese embassy in Washington did not immediately respond to requests for comment.

Microsoft has had a difficult relationship with China and has fought software piracy for years, even if it appealed to the Chinese government.

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Microsoft CEO Satya Nadella welcomed Chinese President Xi Jinping at its headquarters in Redmond, Washington in 2015. A year later, the CEO visited Beijing, where he met political leaders. In 2017, Microsoft announced a version of Windows 10 software for use by the Chinese government. The customized version contained different types of encryption and other changes.

Last year, Microsoft was also caught up in tensions between Beijing and the Trump administration over the popular short video app TikTok, owned by Chinese parent ByteDance Ltd. The US government has urged TikTok to sell its US operations. Microsoft has offered to buy a badly depressed business in China. The contract eventually collapsed.

Earlier this year, software giants were targeting previously unknown security flaws in email products used by businesses by a Chinese hacking group believed to be government-sponsored. Said. The Microsofts Bing search engine, also available in China, caused controversy earlier this year for users in the United States as well as China after blocking the iconic Tankman image associated with the 1989 Tiananmen Square Incident. The company blamed accidental human error and restored the image.

LinkedIn is one of the few glorious spots Microsoft had in China, with more than 50 million users in China.

Still, the platform was under more scrutiny by regulators this year. In May, Microsoft was the only foreign company out of 105 apps called by Chinese internet regulators for improper data collection, and both LinkedIn and Bing were listed. LinkedIn also received 42 requests from Chinese authorities to remove content last year, according to a semi-annual transparency report. This is the most received by the company from any country. We have responded to 38 out of 42 requests.

Attempts to localize LinkedIn services in China using the Chinese app Chitu, introduced in 2015, ended because they were unsuccessful two years ago.

LinkedIn generated $ 10.3 billion in revenue at Microsoft last fiscal year. That’s about 6% of a company’s total sales. The unit hasn’t split China’s revenue, but Microsoft President Brad Smith said in September that China accounted for less than 2% of total tech company revenue, a percentage that has declined over the past few years. I said there is.

Microsoft continues to pursue business in China. During the Covid-19 pandemic, the company promoted the growth of China of Teams, a new product for video conferencing and collaboration that Microsoft considers to be its next blockbuster.

High-tech companies in the United States are becoming more vigilant about doing business in China as China seeks stronger control over its data. Last year, Facebook, Twitter, and Google provided services in Hong Kong in a deliberate change in data protection legislation that could hold the Hong Kong government responsible for malicious sharing of personal information online. Warned that it may stop.

Chinese company crackdown

Write to LizaLin at [email protected] and StuWoo at [email protected]

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