LinkedIn runs afoul of new rules in China

SHANGHAI • LinkedIn is often held up as a model of how a foreign Internet company can do business in China. Increasingly, it also serves as an example of how difficult that task can be.

This week, the professional networking service blocked individuals from advertising jobs on its site in China, after it ran afoul of new government regulations requiring it to verify their real identities, according to a person familiar with the situation. LinkedIn said in a statement that companies can still post job listings, but it did not know when it would again allow individuals to do the same.

In August, China's government increased scrutiny on Internet job postings in response to a rash of online hiring scams, mostly for pyramid schemes. New regulations call for companies to have verification of the real identity of those posting job listings.

Beijing has been following up its new regulation with audits, according to the person, who asked not to be named because the person was not authorised to speak publicly.

LinkedIn is a rare foreign Internet company in a country that blocks Facebook, YouTube, Google and other online mainstays in the rest of the world.

It persists in China by closely adhering to local rules. It censors content that the Chinese authorities consider sensitive or objectionable, limits the ability of members to create or join online groups and has given partial ownership of its Chinese operation to local investors.

In August, China's government increased scrutiny on Internet job postings in response to a rash of online hiring scams, mostly for pyramid schemes. New regulations call for companies to have verification of the real identity of those posting job listings.

But in recent months, Beijing has ratcheted up its already strict Internet controls, and such an approach to managing the Web takes its toll on companies.

In this case, the new restrictions are the response to an incident in July, in which a young college graduate killed himself after being deceived by a pyramid scheme.

The 23-year-old, Mr Li Wenxing, got a job as a software developer through an employment website, only to end up forced into becoming part of a pyramid scheme, according to the local news media.

After being forced to borrow hundreds of dollars from family and friends, Mr Li drowned himself in a small pond along a highway on the outskirts of Tianjin, a port city near Beijing.

His death was one of several since the summer, which has spurred an uproar across the country and prompted a government-led crackdown on pyramid schemes.

The disabling of a revenue-generating tool for LinkedIn is a setback for one of the few major foreign Internet companies giving the China market a go. It is not clear how much money LinkedIn, which is owned by Microsoft, makes in China.

NYTIMES

A version of this article appeared in the print edition of The Sunday Times on November 12, 2017, with the headline 'LinkedIn runs afoul of new rules in China'. Print Edition | Subscribe