Censorship, surveillance and profits: a good deal for Apple in China
On the outskirts of this city, in a poor, mountainous province in southwest China, men in hard hats recently put the finishing touches on a quarter-mile-long white building with few windows and a large perimeter wall. There were few signs of his goal, other than the flags of Apple and China flying side by side. Inside, Apple was preparing to store the personal data of its Chinese customers on computer servers managed by a Chinese state-owned company.
Apple CEO Tim Cook said the data was safe. But at the Guiyang data center, which Apple hoped would be completed next month, and another in the Inner Mongolia region, Apple has largely ceded control to the Chinese government. Chinese state employees physically manage the computers. Apple ditched encryption technology used elsewhere after China did not allow it. And the digital keys that unlock the information on those computers are stored in the data centers they are supposed to secure. Internal Apple documents reviewed by the New York Times, interviews with 17 current and former Apple employees and four security experts, and new documents filed in a US court case last week provide rare insight into compromise that Cook did to do business in China. Apple now assembles almost all of its products and generates a fifth of its turnover in China. But just as Cook figured out how to make China work for Apple, China makes Apple work for the Chinese government.
Cook often talks about Apple’s commitment to civil liberties and privacy. But to stay on the safe side of Chinese regulators, his company has jeopardized the data of its Chinese customers and helped with government censorship in the Chinese version of its App Store.
Chinese leader Xi Jinping is increasing his demands on Western companies, and Cook has repeatedly resisted those demands. But he ultimately approved plans to store customer data on Chinese servers and aggressively censor apps, according to interviews with current and former Apple employees. “Apple has become a cog in the censorship machine that presents a government-controlled version of the Internet,” said Nicholas Bequelin, Asia director of Amnesty International, the human rights group. Times analysis found that tens of thousands of apps have disappeared from Apple’s Chinese App Store in recent years, more than previously known, including foreign news outlets, services gay dating and encrypted messaging apps. He also blocked tools for staging pro-democracy protests and bypassing internet restrictions, as well as apps on the Dalai Lama.
And in its data centers, Apple’s compromises have made it nearly impossible for the company to block the Chinese government from accessing emails, photos, documents, contacts and locations of millions of Chinese residents, experts say. security and Apple engineers.
The company said it follows Chinese laws and does everything it can to protect customer data. An Apple spokesperson said the company still controls the keys that protect the data of its Chinese customers and that Apple uses its most advanced encryption technology in China. Apple added that it removed the apps only to comply with Chinese laws. “These decisions are not always easy and we may not agree with the laws that shape them,” the company said.
No plan B
In 2014, Apple hired Doug Guthrie, the outgoing dean of the George Washington University business school, to help the company navigate China, a country he had spent decades studying.
One of his first research projects was Apple’s Chinese supply chain. Guthrie concluded that no other country can provide the scale, skills, infrastructure and government support that Apple needs. Chinese workers assemble almost all iPhones, iPads and Macs. Apple brings in $ 55 billion a year from the region, far more than any other American company in China. “This business model only fits and really works in China,” Guthrie said. “But then you got married to China.” China was starting to pass laws that gave the country greater influence over Apple, and Guthrie said he believed Xi would start seeking concessions soon. Apple, he realized, didn’t have a plan B.
In November 2016, China approved a law requiring that all “personal information and important data” collected in China be kept in China. This was bad news for Apple, which had staked its reputation on protecting customer data. While Apple regularly responded to court orders to access customer data, Cook dismissed the FBI after asking Apple for help breaking into an iPhone belonging to a terrorist implicated in the murder of 14 people in San Bernardino. , in California. in their iCloud. But for most of this information, Apple also has the digital keys to unlock this encryption. Locating keys to Chinese customer data has been a sticking point in discussions between Apple and Chinese officials, two people familiar with the deliberations said. Apple wanted to keep them in the United States; Chinese officials wanted them in China. The cybersecurity law came into effect in June 2017. In a first agreement between Apple and Chinese officials, the location of the keys was intentionally left vague, one person said.
But eight months later, the encryption keys were heading to China. It is not known what led to the change.
The documents examined by the Times do not show that the Chinese government had access to the data. They only indicate that Apple has made compromises that make the government’s job easier.