Sources detail how Apple relented to escalating demands from China, making changes to governance of its Chinese users' data and agreeing to censor its platforms

Apple built the world's most valuable business on top of China. Now it has to answer to the Chinese government.

New York Times 2021-05-18

Context & Ripple Effects

Apple had already limited Apple News in China amid censorship pressure, and its later push into services tied more of its China business to government approvals. The reported concessions make that earlier Apple News restriction part of a broader operating model rather than an isolated content decision.

Related reporting says a 2016 Cook-China agreement involved major economic commitments, while Apple’s Beijing diplomacy later helped it avoid crackdowns. That history explains why control over user-data governance and platform content is central to Apple’s market access.

First-order effects

Apple changes how Chinese users’ data is governed and censors platforms in response to Chinese government demands, giving China more direct influence over the company’s local operations.
Chinese users receive a version of Apple’s services whose data oversight and available content are set under those local compliance terms.

Second-order effects

Apple’s growing reliance on services requiring approval, documented in its closer commercial ties to China, makes future product and service decisions more exposed to government conditions.
The concessions sharpen the trade-off for Apple’s global governance: later scrutiny of its proposed Alibaba AI arrangement centered on the same issues of data sharing and censorship.

Third-order effects

If this compliance pattern persists, market access in China will increasingly require foreign platforms to localize not only content but also governance of user data.
Apple’s experience points to governance becoming a durable competitive input: companies with the capacity and willingness to meet state conditions retain access, while product uniformity across markets weakens.

The trend: China is making data governance and content control conditions of platform market access, pushing global technology firms toward country-specific operating models.

Discussion

@jacknicas Jack Nicas on x
🚨NEW: Apple is jeopardizing its Chinese users' data and augmenting the Chinese government's censorship to placate authorities and keep its business running. Here is our multiyear investigation into Apple's Faustian bargain in China: https://www.nytimes.com/...
@matthew_d_green Matthew Green on x
Interesting story about how Apple is moving encryption keys to China. https://www.nytimes.com/...
@matthew_d_green Matthew Green on x
Ok, I have lots of things to say about encryption keys and hardware security modules. But forget all that for a second. WTF Apple. https://twitter.com/...
@matthew_d_green Matthew Green on x
Not only is Apple being forced to move Chinese citizens' HSMs to China, China specifically refused to certify the Thales HSMs. This is actually pretty fascinating. https://twitter.com/...
@matthew_d_green Matthew Green on x
“A legal shield from American law.” https://twitter.com/...
@matthew_d_green Matthew Green on x
It's really hard to know what to make of this. There are two good theories: 1. China does not trust western HSM hardware to keep them safe. 2. China felt the Thales HSMs were *too* safe, ie they would be difficult to for China to access.
@matthew_d_green Matthew Green on x
Anyway, the big thing you should get from this article is the direction of the trend. Apple is clearly being forced to give the Chinese government more control over customer data. The current compromise may even be “ok”, in the sense that some end-to-end encryption is allowed.
@kevinroose Kevin Roose on x
Feels like a narrative-shifting story https://t.co/B4JEAUN4v6
@a_centrism @a_centrism on x
This is the moral authority that Apple brings to the table when it fires and defames employees who write best-selling and critically-acclaimed books that annoy feminists. https://twitter.com/...
@thelinuxexp @thelinuxexp on x
« But Apple's interests would never align with China », they said in so many comments on so many videos. Hmmm yeah, they do. Their interests align perfectly. One wants more reach and money, the other wants more data on their citizens. https://twitter.com/...
@matthew_d_green Matthew Green on x
Thales is theoretically a French company but its products are manufactured and used throughout Europe and North America. They're certified at the highest levels of FIPS and beyond. Yet China would not accept them. That's... interesting.
@nelliebowles Nellie Bowles on x
Will be fascinating to see how the apologists handle this absolute banger of an investigation by @jacknicas and co. https://www.nytimes.com/...
@matthew_d_green Matthew Green on x
So Apple responded by designing and building their own HSMs, based on the Apple TV platform. Presumably these include secure processors like the T2 chip in MacBooks. But this isn't “high end HSM” hardware. https://twitter.com/...
@jeffehobbs Jeff Hobbs on x
@daringfireball Good piece. It's a tricky issue, and you have to weigh the presence of “compromised Apple” against “not Apple” and it's hard to imagine the latter being the better choice.
@mims Christopher Mims on x
Privacy for me, but not for thee https://twitter.com/...
@matthew_d_green Matthew Green on x
But sooner or later the Chinese government is going to ask Apple for something that it doesn't want to give up, and Apple is going to have to make a choice. Maybe they already have.
@nickkristof Nicholas Kristof on x
A devastating piece about @Apple compromising principles to gain market share in China. Apple appears to have been supine and disingenuous in its business arrangements with China. https://twitter.com/...
@repkenbuck Rep. Ken Buck on x
Apple likes to lecture other companies and pretend it's the company that protects its users' privacy. Clearly they are willing to forego those commitments to retain access to a billion+ customers and cheap labor. https://www.nytimes.com/...
@jacknicas Jack Nicas on x
Let's start in Guiyang, a city in southwestern China where a building a quarter-mile long has the flags of Apple and China flying out front. Inside, Apple is preparing to store its Chinese users' data on computers owned and run by the Chinese government. Photo: @KeithBradsher htt…
@jacknicas Jack Nicas on x
Since Apple moved data to China, it has given the Chinese authorities the contents of an undisclosed number of iCloud accounts in nine separate cases. Apple had never provided such data in China previously. The reason why? American law prohibited it.
@jameshohmann James Hohmann on x
A very, very bad look for Tim Cook and Apple. American business must stop appeasing Red China. The regime in Beijing is perpetrating an ongoing genocide. https://twitter.com/...
@ntaylor963 Nathan Taylor on x
This good on Apple's options in relation to China. The first step is to admit Apple has *only* bad options re China. “But what happens to Apple's enormous can't-be-replicated-anywhere-else-in- the-world Chinese supply chain operations?” https://daringfireball.net/... https://twit…
@jacknicas Jack Nicas on x
Apple has deemed a number of topics off limits in China, including Tiananmen Square, Falun Gong, the Dalai Lama, and independence for Tibet and Taiwan. Meanwhile, Apple hosts apps from the Chinese paramilitary group accused of detaining Uyghurs. https://www.theinformation.com/ ..…
@ajitpai Ajit Pai on x
Quite a thread from @jacknicas. https://twitter.com/...
@dalefranks @dalefranks on x
The most important strategic issue the US faces today is decoupling our supply chain and technology from China. The policy of hope that engaging China economically would lead to political liberalization has failed. Time to recenter our supply chain in the Western Hemisphere. http…
@nytimesbusiness @nytimesbusiness on x
Apple has made compromises in China that make it nearly impossible for it to stop the Chinese government from gaining access to the emails, photos, documents and location of millions of Chinese residents, according to security experts and Apple engineers. https://www.nytimes.com/…
@rachelbovard Rachel Bovard on x
It seems like a lot of work for Apple to do business in China. First they have to manage all those Uighur slaves. Then they have to remove all the apps that might threaten the grip of the authoritarian state. https://www.nytimes.com/...
@jacknicas Jack Nicas on x
But now Apple has granted legal ownership of iCloud data in China to a Chinese state-owned company — a move designed to get around American law. Apple also added this highlighted portion to its iCloud terms and conditions in China. https://www.apple.com/... https://twitter.com/..…
@911corlebra777 Pete Evans on x
This thread is horrifying. Democracies, particularly the US, where most of the tech giants are, need to rein these guys in as they're giving away the keys to the kingdom. Latest offender, Apple. Remember when they wouldn't play ball with the FBI on encryption? cc @thespybrief htt…
@jacknicas Jack Nicas on x
We learned this via internal Apple docs and interviews with 17 current & former Apple employees and 4 security experts. The experts and Apple engineers said Apple's compromises would make it nearly impossible for it to stop the Chinese government from gaining access to the data.
@timbray Tim Bray on x
Apple's China conundrum explored by @gruber: https://daringfireball.net/... I think any biz with this kind of complex relationship to China has to be planning for when things break; whether over Taiwan or the Uighurs or HK or who-knows-what. Status quo seems unsustainable.
@sarthakgh Sar Haribhakti on x
“Privacy Is A Fundamental Human Right” - Tim Cook Look, no one wrote a book with a passage about this so how are the employees supposed to get outraged about this? https://twitter.com/...
@wokyleeks Critical Horse Theory Bonds on x
Lick that boot Apple. I suspect this “innovation” around US law is about as legal and cool as their “innovation” around paying taxes. @thespybrief https://twitter.com/...
@micsolana Mike Solana on x
it's a shame xi jinping never wrote a moderately cringe passage about dating life in the bay area we could take out of context. might force apple to reconsider its relationship with china, a despotic foreign superpower, and solve a few of these human rights issues. https://twitte…
@backlon Dieter Bohn on x
This is an important story that manages to be both surprising and not surprising at all at the same time. https://twitter.com/...
@matthew_d_green Matthew Green on x
Apple asked a lot of people to back them against the FBI in 2015. They used every tool in the legal arsenal to prevent the US from gaining access to their phones. Do they think anyone is going to give them the benefit of the doubt now?
@jacknicas Jack Nicas on x
Meanwhile, Apple has become a powerful tool in China's vast censorship operation. We found that Apple proactively censors its Chinese App Store, using software and employees to flag and block apps that Apple managers worry could upset Chinese officials. https://www.nytimes.com/..…
@caseynewton Casey Newton on x
Damn. Apple gave away legal ownership of Chinese customers' data to something called Guizhou-Cloud Big Data, owned by the government of Guizhou Province, so it could get around American laws that prohibit sharing data with Chinese law enforcement https://t.co/GhgT3XNRCS
@dinodaizovi Dino A. Dai Zovi on x
Prediction: China may be the first, but they won't be the last (for better or worse). https://twitter.com/...
@jacknicas Jack Nicas on x
“We have never compromised the security of our users or their data in China or anywhere we operate,” Apple said in a statement. Apple added that it still controlled the encryption keys and that its new encryption technology in China is more advanced than what it uses elsewhere.
@yaqiu @yaqiu on x
Read this in full. It makes such a mockery of Tim Cook's fake crusade for data privacy. I wonder what happened to the people whose iCloud data Apple shared with the Chinese govt. Possible some now in trouble or even in jail for merely criticizing Xi? https://www.nytimes.com/...
@hawleymo Josh Hawley on x
This is a truly shocking report of a supposedly American company selling out American workers, betraying American ideals, and effectively promoting a slave-labor economy in China https://www.nytimes.com/...

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