Amazon.com Inc is selling off the Chinese unit of Amazon Web Service (AWS) to Beijing Sinnet Technology, the partner of the company due to the tight regulation of online data. The US retail giant is facing problems that are creating for technology firms operating in the world’s second-largest economy.
A deal worth 2 billion yuan or $301 million could see the Chinese company taking over the Chinese web services business of Amazon. This deal will conclude the cloud-computing business of the U.S. firm in China.
Back in August 2016, Sinnet started operating the Amazon services in China. In an official statement issued late on Monday, they stated that the pending purchase would help the unit to “comply with local laws and regulations and further improve service quality and security”.
Amazon is yet to publish any kind of official announcement though.
Recently, the rules on foreign data and cloud services that include new surveillance measures and increased scrutiny of cross-border data transfers, were a bit tightened by the Chinese regulators.
Back in August, Sinnet informed the customers that they will soon begin the process that would see the VPNs and other services on its networks that allow users to circumvent China’s Great Firewall, being shut down. They said it to be the result of direct instructions from the government.
The new national cyber laws came into effect in China in 2017. The changes are believed to be linked with the new laws. These new laws were enforced with the sole purpose of making network providers liable for content deemed either dangerous or offensive according to “socialist values”.
It was 2013 when the agreement between Amazon Web Services and the provincial governments in China was signed. Amazon had worked with some of China’s largest tech firms like Xiaomi Inc, Qihoo 360 Technology Co Ltd and Kingsoft Corp Ltd previously.
In the recent years, the Cloud services have become the most crowded and competitive field in China. The Alibaba Group Holding Ltd’s cloud unit alone has opened over a dozen overseas data centers since 2016.