Apple may be working more closely with the Chinese government than management wants consumers to believe. A report from the Chinese state media indicates that Apple has agreed to comply with Beijing’s requests for “security checks” on its devices.
The report comes the same week NSA whistleblower Edward Snowden claimed that Apple loads spyware into all of its iPhones.
In his first-quarter letter to investors of Greenlight Capital, David Einhorn lashed out at regulators. He claimed that the market is "fractured and possibly in the process of breaking completely." Q1 2021 hedge fund letters, conferences and more Einhorn claimed that many market participants and policymakers have effectively succeeded in "defunding the regulators." He pointed Read More
Apple agrees to Chinese agency’s rules
The People’s Daily tweeted that Apple has become the first foreign company to agree to rules put in place by China’s Cyberspace Administration. The folks at Quartz.com spotted the tweet, which goes along with a similar report from Chinese language website The Beijing News.
The reports indicate that Apple CEO Tim Cook told Chinese internet chief Lu Wei last month that they will allow the Internet Information Office to run “security checks” on all Apple products sold on the Chinese mainland.
Chinese officials have been concerned that Apple devices could allow not only the company but also U.S. intelligence agencies to spy on their citizens. Of course the feeling is mutual, as U.S. officials keep close tabs on how much telecommunications equipment from China is used in the nation’s cellular networks.
What is meant by “security checks”?
Of course it’s unclear exactly what sorts of “security checks” Apple may be allowing the Chinese government to run. Cook recently denied the “rumors” that the company had built “back doors in its devices” and was allowing third parties to access data on those devices. He said they have never done that and will not do it in the future.
In response, The Beijing News quotes Lu as saying, “It doesn’t matter what you say, you should let our internet safety department do a safety assessment. We need to reach our own conclusions to put the consumer at ease.”
So if Apple isn’t giving the Chinese government direct access to its devices, then what kind of “security checks” might Beijing be doing? According to Quartz, analysts tend to agree that Apple is probably allowing Chinese officials to see its source code. In exchange, the company may be allowed to keep doing business in China, which has become its most important market.
The problem with letting them view the source code is that Chinese officials will be able to gain a full understanding of how Apple’s software works. As a result, they would, theoretically, be more easily able to discover vulnerabilities and bugs in Apple’s software and devices. This could enable China to hack into Apple devices all over the world, thus opening up users of iDevices to potentially being spied upon by the Chinese government.
How bad is the potential threat to Apple users?
According to Quartz, China Market Research Group principal Ben Cavender reportedly said that if this interpretation is true, then it would be an incredible deal. He added that Apple hasn’t typically given this information to other governments.
However, it illustrates just how much Apple wants to be in China—and the lengths management will go to in order to sell iPhones and iPads there. Cavender doesn’t think Chinese officials would have access to information outside of China though and notes that if they did somehow manage to get access to data from outside their country, “someone at Apple would probably notice,” thus limiting the risk for Apple users.
In China, consumers already assume the government is looking over their shoulders, Cavender noted. As a result, they probably won’t be too worried at the thought of Chinese officials viewing their information using Apple’s devices.