LinkedIn ends service in China citing “challenging” environment

SEATTLE – LinkedIn announced on Thursday that it would discontinue its professional networking service in China later this year, citing “a significantly more difficult operating environment and higher compliance requirements”.

The service, which is owned by Microsoft, announced that it will offer a new app that will focus solely on job postings in China. The new app won’t have social networking features such as post sharing and commenting, which have been critical to LinkedIn’s success in the US and elsewhere.

The move from LinkedIn ends one of the most far-reaching experiments by a foreign social network in China, where the Internet is tightly controlled by the government. Twitter and Facebook have been banned in the country for years; Google withdrew more than a decade ago. China’s Internet, which operates behind a filter system called the Great Firewall, is heavily censored and goes in its own direction.

When LinkedIn expanded with a localized service in China in 2014, it provided a preliminary model for other large overseas internet companies looking to enter the country’s vast, lucrative, and heavily censored market. The company worked with a well-connected venture capital firm that would help them with government relations.

But in order to do business in China, LinkedIn also agreed to censor the posts of its millions of Chinese users in accordance with Chinese laws, something other American companies have often hesitated or been unable to do. Even in 2014, LinkedIn acknowledged the challenge, saying, “LinkedIn strongly supports freedom of expression and fundamentally contradicts state censorship. At the same time, we also believe that the absence of LinkedIn in China would deprive Chinese professionals of the opportunity to connect with others. “

Seven years later, it turned out that the experiment didn’t work. No major internet platform has followed in LinkedIn’s footsteps. Business in China has struggled as it faced large local competitors and a population skeptical of publicly listing valuable contacts.

The environment in China has also become more difficult. Since President Xi Jinping took the reins of the Communist Party in 2012, he has cracked down on what can be said online repeatedly. As chairman of the growing power of the Cyberspace Administration of China, the country’s internet regulator, Mr. Xi transformed China’s internet from a place where some sensitive issues were censored to a place where critics were censored for an ever-changing series of violations like joking about mr. be arrested .Xis costs.

In March, the regulator reprimanded LinkedIn for not having control over political content, said three people who were briefed on the matter at the time. Officials asked LinkedIn to do a self-assessment and offer a report. The service was also forced to suspend new registrations from users in China for 30 days.

The site also suffered as U.S. relations with China deteriorated and anger grew over LinkedIn’s complicity in China’s information controls in Washington. American lawmakers criticized the company after LinkedIn stopped displaying the profiles of several activists and journalists in China in recent months.

In a letter last month, Republican Senator Rick Scott from Florida wrote to Satya Nadella, Microsoft’s chairman, asking why three journalists’ accounts had been censored. Mr. Scott described the censorship as “gross appeasement and an act of submission to communist China.”

LinkedIn’s business has also grown, with China making only a minimal contribution. Since Microsoft bought LinkedIn for $ 26.2 billion in 2016, the company’s revenue has tripled. Mr Nadella told investors in July that LinkedIn’s annual revenue exceeded $ 10 billion, up 27 percent from the previous year.

LinkedIn declined to comment beyond its announcement.

Although Microsoft has been trying to build a market in China for more than a decade, it has had only modest success. Last year, Brad Smith, president of Microsoft, said the country accounted for less than 2 percent of its sales.

Microsoft Windows and Office are widespread in China, but many are pirated. The company has tried to solve the problem by hosting its software online and hiring a large Chinese military contractor to help it offer an operating system that the Chinese government is more familiar with. Microsoft’s search engine Bing, one of China’s last remaining portals to the global Internet, appeared to have been temporarily blocked by state censorship in 2019, despite the service referring users in China to state media accounts on controversial topics such as the Dalai Lama.

It remains unclear what exactly will happen to the millions of Chinese user accounts on LinkedIn. When foreign internet companies stopped offering locally censored services in the past, their websites were quickly blocked by the government.

This is a developing story. Check back for updates.

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