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Apple’s compromises in China: 5 takeaways

Over two decades, Apple built the world’s most valuable company on top of China. It now assembles nearly all of its products in the country and generates a fifth of its sales there. In turn, the Chinese government has pressured Apple executives to make compromises that flout the values they espouse.

An investigation by The New York Times revealed how Apple has risked its Chinese customers’ data and aided the Chinese government’s censorship. Here are five takeaways:

Apple stores customer data on Chinese government servers.
In response to a 2017 Chinese law, Apple agreed to move its Chinese customers’ data to China and onto computers owned and run by a Chinese state-owned company.

Chinese government workers physically control and operate the data center. Apple agreed to store the digital keys that unlock its Chinese customers’ information in those data centers. And Apple abandoned the encryption technology it uses in other data centers after China wouldn’t allow it.

Independent security experts and Apple engineers said Apple’s concessions would make it nearly impossible for the company to stop Chinese authorities from gaining access to the emails, photos, contacts, calendars and location data of Apple’s Chinese customers.

Apple said it had retained control of the keys to the data and was using more advanced encryption technology in China than in other countries. “We have never compromised the security of our users or their data in China or anywhere we operate,” the company said in a statement.

Apple now shares customer data with the Chinese government.
U.S. law has long prohibited Apple from turning over data to the Chinese authorities. But in moving data to China, Apple created a legal arrangement with the Chinese government that gets around U.S. laws.

Apple made Guizhou-Cloud Big Data, or GCBD, a company owned by the Guizhou provincial government, the legal owner of its Chinese customers’ iCloud data. Apple and GCBD also inserted new language into the Chinese iCloud terms and conditions that granted them “access to all data that you store on this service” and allowed the companies to share the data with each other. Chinese authorities now demand Apple customer data from GCBD, not Apple.

Before the arrangement, Apple said it had never provided the contents of a customer’s iCloud account to the Chinese authorities. Since the arrangement, Apple has provided the contents of an undisclosed number of accounts in nine separate cases, it said.

Apple proactively removes apps to placate Chinese officials.
Apple has created an internal bureaucracy that rejects or removes apps the company believes could run afoul of Chinese rules. Apple trains its app reviewers and uses special software to inspect apps for any mention of topics Apple has deemed off limits in China, including Tiananmen Square, the Chinese spiritual movement Falun Gong, the Dalai Lama, and independence for Tibet and Taiwan.

Apple said it removes apps in China to comply with local laws.

Apple banned apps from a Communist Party critic.
In 2018, China’s internet regulators ordered Apple to reject an app from Guo Wengui, a Chinese billionaire who had broadcast claims of corruption inside the Communist Party. Top Apple executives then decided to add Mr. Guo to Apple’s “China sensitivities list,” which meant software would scan apps for mention of him and app reviewers would be trained to reject his apps, according to court documents.

When an app by Mr. Guo later slipped by Apple’s defenses and was published to the App Store, Chinese officials contacted Apple wanting answers. Apple’s app review chief then sent colleagues an email at 2:32 a.m. that said, “This app and any Guo Wengui app cannot be on the China store.” Apple investigated the incident and later fired the app reviewer who had approved the app.

Apple said that it had fired the app reviewer for poor performance and that it had removed Mr. Guo’s app in China because it had determined it was illegal there.

Tens of thousands of iPhone apps have disappeared in China.
Since 2017, roughly 55,000 active apps have disappeared from Apple’s App Store in China, with most remaining available in other countries, according to a Times analysis.

More than 35,000 of those apps were games, which in China must get approval from regulators. The remaining 20,000 cut across a wide range of categories, including foreign news outlets, gay dating services and encrypted messaging apps. Apple also blocked tools for organizing pro-democracy protests and skirting internet restrictions, as well as apps about the Dalai Lama. NY Times

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