Amazon Sells Portion Of Business For $300 Million Because Of Chinese Law

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Eric Lieberman Managing Editor
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Amazon is selling a portion of its business to a Chinese technology company for roughly $300 million in order to comply with law in that country, according to multiple recent reports.

Specifically, the cloud computing division called Amazon Web Services (AWS) is giving up “certain physical infrastructure assets to” Beijing Sinnet Technology Co, like computing equipment, reports Reuters, citing an Amazon spokesman.

China favors domestic firms over foreign ones with paternalistic policies.

“Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services,” AWS said, according to The Wall Street Journal. “As a result, in order to comply with Chinese law, AWS” made the business deal.

Amazon will still possess the intellectual property for its AWS services.

Big name tech companies in the U.S. often bend over backward to either attempt to penetrate the highly protected Chinese market, or maintain a somewhat established presence.

Beijing Sinnet Technology, Amazon’s partner in China, told customers months ago to stop using illegal virtual private networks (VPNs), which can offer secure, private networks for users, but also circumvent internet censorship in the country. If the company intends to continue functioning in China, it has to cooperate with local partners, that often have some degree of government oversight, an AWS spokesman explained.

China is in the process of strengthening its censorship apparatus — commonly known as the Great Firewall of China — and companies like Amazon appear to be furthering Beijing’s ambitions in order to maintain a place in the local market.

Amazon isn’t the only one to make decisions based off a desire to stay in China. RELATED: Power And Billions Of Dollars: Apple’s Deal With Communist China, And Why They Did It)

Apple, Facebook and Google have all made similar choices, some which show they are essentially selling out to China, a country with a lack of freedoms when it comes to the internet, the natural foundation of these tech companies’ operations and services. It’s not clear how much these companies would affect public policy in China, though, if they were to protest or boycott the nation.

Amazon did not respond to The Daily Caller News Foundation’s request for further details by time of publication.

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