Apple to allow Chinese government to inspect products

25 Jan 2015 | Author: | No comments yet »

Apple Allows China to Conduct Security Inspections of iPhones.

SAN FRANCISCO (MarketWatch) — Apple Inc. The cybersecurity regulator recently announced government’s plans to enforce a new set of rules aimed at maintaining state security and protecting the public interest.

Apple will allow the Chinese government to perform security inspections on its products to quell concerns that they are used for surveillance of Chinese citizens, according to reports.While there was no other information available on the paper’s website, the tweet echoes a report in the Beijing News (link in Chinese) that Apple chief executive Tim Cook informed Lu last month that Apple would let China’s State Internet Information Office conduct “security checks” on all products that it sells on the mainland.

China has been concerned that Apple devices like the iPhone enable the company—or worse, US intelligence agencies—to spy on Chinese citizens. “There were rumors that Apple built back doors in its devices, and let third parties have data and access those devices, but that was never true and that we would never do that in the future either,” Cook reportedly said. The director of the state department, Lu Wei, reportedly told Cook that China was one of the biggest markets for the company, but that inspection of products to ensure national security was essential. The move is significant because other US companies including Google and Facebook have earlier refused to undergo security checks. “These firms have had to leave the Chinese market because of their refusals to comply,” State media said. Roughly translated, Cook is said to have told Wei that, although there were rumors to the contrary, Apple has never had any security backdoors or provided customer data to third parties.

Lu Wei, the Office’s director, first met with Cook last year to express concern over so-called “backdoors” in Apple’s iOS software that could be exploited by foreign governments or third parties to collect data surreptitiously. Wei reportedly responded that Apple’s products would have to pass security audits performed by Chinese authorities in order to make sure that they were acceptable for customer use.

Last summer, a state-run television program in China accused Apple of tracking people’s locations through the “frequent locations” feature on the phone. Apple has yet to comment on the Chinese reports although on its website, it promises to be transparent about how it handles request for information from government agencies. Among the iOS features suspected as posing a national security threat were Frequent Locations, according to a report on China Central Television last year, which also implied it could expose state secrets. The report said that “those with access to that data could gain knowledge of China’s economic situation or even state secrets.’” Apple denied the allegations, saying that Frequent Locations are encrypted and not backed up on any sort of virtual cloud.

It is not clear how exactly Apple will accommodate China’s request while protecting its proprietary technology or how the decision will affect its privacy policy. Apple’s decision comes amid sharp growth in iPhone sales in China, which has overtaken the US to become the largest iPhone market. iPhone holds the third position in the country’s smartphone market after Xiaomi and Lenovo. But given the People’s Daily emphasis on Apple being the first foreign company to comply, other big tech players, including Samsung Electronics 005930, +0.58% BlackBerry BBRY, +1.86% and Microsoft MSFT, +0.11% are likely to follow in its wake.

China is one of Apple’s most promising emerging markets and the company is clearly looking to curry favor to ensure the government doesn’t stand in the way. The regulator said last year that it would launch a security review targeting IT products, services and suppliers preparing to enter the country’s market. Most alarmingly, Alpha added, an agreement would mean that “Apple users world-wide are much more vulnerable to spying from the Chinese government.” An Apple spokesman did not reply to an emailed request for comment.

The company has come under fire from Chinese state media in the past, facing accusations of providing user data to US spy agencies and calls for “severe punishment”. Google’s services have also been disrupted in China for over a month, while the central government procurement office has banned new government computers from using Microsoft’s Windows 8 operating system. The government wants to prevent Chinese computer systems from being controlled illegally, disturbed or shut down by problematical IT products and the services of some suppliers, as well as protecting users’ privacy, it said. Other US hardware firms such as Cisco and IBM have experienced a backlash in China from what analysts and companies have termed the ‘Snowden Effect’, after US spying revelations released last year by former NSA contractor Edward Snowden.

If that is in fact what has been agreed, it’s a landmark deal, Cavender said, and Apple has not generally provided such information to other governments. “This is a unique situation where China is such an important market to Apple, and they need to be in it. The US launched a highly public offensive against the threat of Chinese industrial espionage in May, announcing that it was charging five members of the People’s Liberation Army with stealing secrets from US companies.

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