Picture: REUTERS/ANN WANG
Picture: REUTERS/ANN WANG

Apple stores data from its Chinese customers in servers owned by a Chinese state-owned company, potentially making it easy for the government to gain access to the information, the New York Times reported.

The data deal, in response to a 2017 Chinese law, is one of several concessions to the government the iPhone maker has made over the past five years to do business in China, the Times said on Monday, citing internal company documents and interviews with current and former employees as well as cybersecurity experts. The policy for Chinese consumers is in contrast to the tougher privacy standards for users in the US, according to the newspaper.

The company said in a statement reported by the Times that it followed the laws in China and did everything it could to keep the data of customers safe. “We have never compromised the security of our users or their data in China or anywhere we operate,” the company said.

Human rights advocates and some legislators have criticised Apple for the steps it takes, including censoring content, to keep from running afoul of regulations that control the dissemination of information inside China.

Senator Marsha Blackburn, a Tennessee Republican, said in a statement on Monday night that “Apple is giving Beijing the keys to peer into the lives of millions of Chinese users. By doing so, Apple is possibly putting the lives of many, including human rights activists, at risk.”

Greg Guice, director of government affairs at Public Knowledge, an advocacy group, said in a statement that “users of Apple products were surely sold the devices based on the company’s commitment to the privacy of their data. We see now that was an illusion. China’s willingness to invade their citizens’ privacy by forcing companies operating within their borders to hand over data is a sad, but an expected, turn of events.”

Companies operating in China are required to respect its sovereignty and comply with its laws, Chinese foreign ministry spokesperson Zhao Lijian said at a regular media briefing on Tuesday in Beijing. “Chinese laws protect data security and personal information, and there are clear provisions for such rights and interests for citizens and organisations,” he added.

In December, Ken Buck, a Republican legislator, chastised Apple over reports that the company removed certain video games from its platform in China.

Content purges

Apple said in 2017 that it would establish a data centre in China to speed up services such as iCloud for local users and abide by laws that require global companies to store information within the country. The company said at the time that it would build and run the data centre in partnership with an entity cofounded by the province of Guizhou.

Apple also proactively blocks apps from its App Store in China that managers worry could generate criticism and pushback from Chinese authorities, according to the New York Times report. Tens of thousands of apps have disappeared from Apple’s Chinese App Store over the past several years, more than previously known, the newspaper reported.

Apple has made large-scale purges of content in the past, according to researchers. The company removed more than 30,000 apps, 90% of them games, from its iPhone App Store in China, Qimai Research Institute said in August 2020.

The Times said an Apple employee at the company’s headquarters in Cupertino, California, was fired for letting onto the App Store in China an app from exiled Chinese billionaire Guo Wengui that broadcast claims of corruption in the Chinese Communist Party. Apple denied the firing was related to the app issue, the Times reported. The employee has sued the company, according to the newspaper.

Apple’s ties to China go back decades. Much of the company’s supply chain is located in China, where many of its products are manufactured and assembled. The company generated more than $40bn, or almost 15% of total sales, in Greater China during its last fiscal year, according to data compiled by Bloomberg. Apple’s Greater China region includes China, Taiwan and Hong Kong.

Bloomberg News. More stories like this are available on bloomberg.com

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