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What Apple’s compromises on privacy in China mean for India

Apple has risked its customers’ data and aided government censorship in China in a bid to appease the authorities there, a New York Times (NYT) investigation has revealed. This goes against the company’s carefully crafted image as a defender of privacy and civil liberties.

China assembles most of Apple’s products and the country also generates one-fifth of the tech giant’s revenue. Using this as leverage, the Chinese government has pressured Apple into making compromises that the company doesn’t make in any of its other markets. While India doesn’t hold the same leverage yet, it is an emerging market for the iPhone maker and the company has recently ramped up its manufacturing efforts in the country. Apple’s compromises in China could result in Indian authorities asking for similar concessions in the future.

What compromises has Apple made in China?

  1. Stores customer data on Chinese government servers: In 2017 the Chinese government passed a data localisation law requiring companies to store personal information and important data that is collected in China within China. Apple agreed to comply with this law and move its Chinese customers’ data onto servers in a data centre owned and physically managed by a Chinese state-owned company. Until recently, most of that data for Apple’s Chinese customers was stored on servers outside China.
    • What this means for India: India is currently working on the draft Personal Data Protection (PDP) Bill, 2019, which mandates that sensitive personal data must be mirrored in the country and that critical personal data (which will be defined in a later stage) cannot be transferred outside the country. By setting a precedent in China, Apple has shown that it can comply with such laws in other countries if need be. This should give the Indian government more leverage – with a precedent having been set – when it comes to policy considerations in India.
  2. Uses different encryption technology for customer data: Apple is also not using the same encryption technology that it uses in its other data centres because China did not allow it. Furthermore, the company has agreed to store the secret digital keys that unlock its Chinese customers’ information in the Chinese data centre, the report stated. Although there is no evidence that the Chinese government accessed data using these keys, security experts and Apple engineers who spoke to NYT said that this makes it nearly impossible for Apple to stop Chinese authorities from gaining access to all personal data of Chinese customers. Apple has refuted these allegations saying that it retains control over the digital keys and is using more advanced encryption technology in China than in other countries.
    • What this means for India: India’s IT Rules, 2021 require significant social media intermediaries to enable tracing the originator of a message. Experts have argued that this will require breaking end-to-end encryption. But if Apple can use different encryption in China to appease the Chinese government, Indian authorities can argue that similar exceptions can be made in India to enable traceability. In fact, these compromises by Apple in China also impact the positions being taken by WhatsApp in India.
  3. Shares customer data with the Chinese government: Apple has exploited a legal loophole to get around US laws prohibiting the company from turning over data to the Chinese government. Apple made a Chinese-owned company called Guizhou-Cloud Big Data (GCBD), which is owned by the Guizhou provincial government, as the legal owner of its Chinese customers’ iCloud data. When the Chinese government request data, they do so to GCDB and not to Apple, helping the latter get around US laws. Before this arrangement was made, Apple had not provided any iCloud data to Chinese authorities, but afterwards, it has provided the contents of an undisclosed number of accounts in nine separate cases, the report stated.
    • What this means for India: India’s new IT Rules also have provisions that allow government authorities to seek data on users under various grounds and under strict time frames. While conversations around regulation of the cloud in India have typically been around giving exemptions to cloud companies, as primary being data processors and storage companies, Apple has set a dangerous precedent that could lead Indian authorities to ask for similar privileges from foreign companies operating in India.
  4. Proactively removes apps that might offend Chinese authorities: According to the NYT investigation, Apple has created an internal system that rejects or removes apps that the company thinks might be against Chinese laws even before the authorities seek any such removal. Apple has trained its app reviewers to look for topics that are deemed as off-limits in China. These topics include Tiananmen Square, the Chinese spiritual movement Falun Gong, the Dalai Lama, and independence for Tibet and Taiwan.  Another startling revealing was that roughly 55,000 apps have disappeared from Apple’s App Store in China since 2017, with most of these apps still available in other countries. Over 35,000 of these apps were games, which in China require government approval. The remaining apps include foreign news outlets, gay dating services, and encrypted messaging apps, the report stated.
    • What this means for India: One of the provisions of India’s new IT Rules encourages social media intermediaries to develop automated tools that proactively remove content that the government has deemed inappropriate. Companies have argued that this could stifle free speech and lead to unnecessary censorship. But Indian authorities can argue that if Apple has proactively censored content in China, why cannot it (or any other company) do the same in India.
  5. Banned apps from a Communist Party critic: Chinese authorities in 2018 ordered Apple to remove an app by Guo Wengui, a Chinese billionaire who spoke out about corruption inside the Communist Party. Top Apple executives added Guo to Apple’s “China sensitivities list,” which would mean that any apps that mention him would automatically come under scrutiny. But somehow one app by Guo escaped this system and found its way into the App Store. Apple removed the app, investigated this incident and said that the “China hide process was not followed.”
    • What this means for India: Last June, India banned 59 Chinese apps citing security concerns. In July, the government banned another 47 Chinese apps. Then, in September, the authorities banned 118 more Chinese apps. Rather than periodically issuing bans on apps, the Indian government can now just ask Apple to maintain a similar database that helps the company proactively reject or remove Chinese apps from the App Store.
  6. Approved almost all of the Chinese government’s app-takedown requests: In the two years ending June 2020, the most recent data available, Apple revealed that it approved 91 percent of the Chinese government’s app-takedown requests, removing 1,217 apps in total. In all other countries combined over that period, Apple only accepted 40 percent of requests and removed 253 apps.
  7. Dropped the “Designed by Apple in California” slogan: Apple stopped branding its phones with its famous “Designed by Apple in California” slogan after employees belonging to Apple’s research and development team in China were angered and protested the use of the slogan, the report stated.

Not the first US tech giant to make concessions to China

This is not the first time a US tech giant has made a special exception to China. Microsoft operates its search engine, Bing, and business networking site, LinkedIn,  in the country after agreeing to comply with the Chinese government’s censorship policy.

Google used to operate a search engine in the country until 2010 but withdrew because it did not want to censor content. But in 2018, the search giant revealed Project Dragonfly, a censored search engine for China. Employees of the company objected to the project for several reasons including enabling censorship and government-directed disinformation in China and establishing a precedent that would make it harder for Google to deny other countries similar concessions. Ultimately, Google terminated the project in 2019.

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