Google has reportedly abandoned its plans to develop and launch a cloud computing product aimed at the Chinese market and other politically sensitive countries according to a new report from Bloomberg.

The news outlet spoke with two employees familiar with the matter who revealed that the now canceled initiative was referred to as “Isolated Region” internally before it was shut down in May.

The initiative was designed to allow Google to set up cloud services that were controlled by a third party such as a locally owned company or a government agency. By doing this, the company would be able to do business in China and other countries with strong restrictions while keeping these products separate from its cloud computing systems and network infrastructure.

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If this sound at all familiar, that's because it is Google's second initiative to develop a product specifically for the Chinese market. Back in 2018, it was discovered that the company was working on a censored search product called Project Dragonfly for China. However, the project was shut down following internal complaints from Google's privacy team.

Isolated Region

According to one of the Google employees Bloomberg spoke with, the Isolated Region initiative first started back in early 2018 as a way to address China's policy that requires Western companies to form a joint venture with a Chinese partner company when they provide data or networking services in the country.

When a joint venture is formed between a Chinese company and a Western one, the partner company retains both physical and administrative control over the user data. By going this route, Google could meet the requirements of Chinese authorities while also creating a barrier between its Isolated Region cloud services and the rest of its network.

In January of last year, Google reportedly decided to pause the version of its cloud product for the Chinese market over privacy concerns related to doing business with the Chinese government and because of rising tensions between the US and China as a result of the trade war between the two countries. The search giant then shifted its focus to working with other countries in Africa, Europe and the Middle East. The employees also revealed to Bloomberg that the initiative was finally canceled in May of this year due to increasingly poor relations between the US and other countries and because of the pandemic.

In addition to allowing Google to operate in countries with greater internet restrictions, Isolated Region was also meant to help the company get around the Clarifying Lawful Overseas Use of Data Act, also known as the CLOUD act, which gave US law enforcement agencies the ability to request personal data stored by American tech companies even if the data is stored on servers located outside of the US.

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Via The Verge