New Regulations Could Make Apple Part of China’s Surveillance and Censorship Machine

| Analysis

China rolled out new (and somewhat expected) regulations Tuesday governing app stores for mobile devices. Those regulations could have the direct effect of conscripting Apple and other app store providers into China’s surveillance and censorship machine.

Censorship in China

China’s Cyberspace Administration is responsible for the new rules. They require app store providers to verify the identity of users and developers, and to keep a record of all user activity for 60 days. App store providers must also monitor and report “postings that contain banned content” to Chinese authorities, to use Bloomberg’s wording.*

Conflicting Values

These regulations strike at the heart of potential conflict for Western corporations doing business in China. Communist and authoritarian values are at often odds with the theoretical democratic ideals. For many companies, this isn’t an issue—money is all that matters. These companies can and will hide behind the mantle of obeying local laws. Our hands are tied, they will say, and we follow local laws everywhere we do business.

It’s an easy out, and companies like Microsoft and Yahoo! have taken it—both remain in the search business in China. Google, on the other hand, decided to exit China rather than kowtowing to censorship rules on what Chinese citizens can search for.

Apple is not in the search business, but it is in the app store business, an important aspect of Apple’s ecosystem. China already shut down iBooks and iTunes movies in that country. Apple’s overall Chinese strategy could suffer significantly if it were forced to shut down the App Store, too.

Or if it chose to shut it down, rather than report banned content to Chinese authorities.

When Capitalist Push Meets Principled Shove

It’s an incredibly difficult position for Apple to be in. The company has an amazing brand in China and an opportunity to greatly expand its business in that country. But it’s becoming increasingly clear that even Apple will run afoul of China’s authoritarianism, sooner or later. With the new rules China announced, that moment may be now.

If so, what will Apple do? Part of me wants Apple to follow Google’s example and close the Chinese App Store.

*Another provision of the new regulations requires developers to get permission before collecting personal information, location data and contacts list. This is something Apple already does.

2 Comments Add a comment

  1. Bryan:

    This is not an a straight-forward black and white issue, and easily nests within that quagmire of solutions that are ‘simple, obvious and wrong’.

    Without doubt, the obvious answer is that Apple should hold to their core principles, which include protecting user privacy, and refuse to participate, thereby shuttering its App Store in China. This would, of course, have the predictable consequence of gutting a principal value proposition of owning an iPhone or an iPad, and would adversely affect the sales of those devices in China. The upshot of this would be to cede the market, no doubt, to homegrown, copycat artists like Xaomi, again no doubt to the delight of many vested interests in China.

    Indeed, I would argue, this is precisely what the majority of Chinese senior leadership would prefer; namely for Apple and other mega corporations to withdraw their nettlesome presence and their counter-revolutionary and free society policies and inclinations, which are corrupting the soul of the Chinese people and their revolution, and leading to such ruinous notions as freedom of expression and the right to privacy, due process and other sordid, decadent Western concepts. Better to see the back of them, and good riddance.

    Those market, business and economic consequences, however, are relatively unimportant, and not the principal reasons for Apple to remain engaged in China. The principal reason for remaining engaged is to affect change and transformation in the evolution of Chinese society to the betterment of the Chinese people, bringing their civil and practised human rights on par with those of the world’s free societies, no doubt to the ire of Chinese senior leadership. Such constructive engagement, a much maligned and misapplied principle in equal measure to be sure, can only be conducted when an entity maintains a meaningful presence in situ, such that their withdrawal would result in a universally recognised net loss for the society in question, and becomes a thing to be averted. Movements and minorities have survived brutal societal phases by becoming indispensable to those societies, such that, by universal acknowledgement, their extermination or removal would undermine that society’s survival.

    In other words, there are times when it is necessary to sacrifice not only a pawn, but a knight, bishop or even queen, in order win the match, or in military parlance, lose a battle in order to win the war. This requires devotion to a higher principle, in this case a commitment to bettering human life over the ethos of core business practices, such as absolute consumer privacy in the immediate term.

    Could this prove to be a slippery slope with no return, the gaping maw of a serpent, the event horizon of a black hole? Yes to all of the above, but only if Apple do not actively leverage their decision to play by Chinese rules to engage, influence, and by degrees, modify attitudes and practices by successive generations of Chinese leaders. This is the seditious long game being played by the Chinese people themselves that has seen gains in freedom of ownership, reproductive rights and modest access to information and expression relative to the onerous conditions of the cultural revolution. Indeed, Apple have already engaged in their own surreptitious changing of attitude towards themselves by adroit adoption of Chinese behaviour relative to slights and accusations by the Chinese government, to their own eventual gain. Being seen by leadership and laity alike as a team player is serious social and cultural capital that can be converted into gains for that society, if Apple are willing to play that game and their investors are willing to gamble on their skill at doing so. As ever, Apple will need continue to need to ignore the criticism and vitriol of their critics who, perennially, have a narrower and more myopic vision than Apple’s leadership.

    In short, there are no absolute right or wrong answers here. However, the highest reach, and therefore potentially the greatest gains for the greater good for the greatest number of people will require a heavy lift, with apparent compromise in the short term and delayed but eventual gratification in the longer term. Thus was Rome built. Thus is sustainable civilisation advanced.

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