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In Defending China Demands, Apple Loses Privacy High Ground

Apple, seen as a bastion of privacy and security, has boxed itself into a corner.

Apple, seen as a bastion of privacy and security, has boxed itself into a corner.

Deep dive analysis: Apple says it will ‘follow the law’ wherever it does business. But questions remain over what happens — and how the company will react — when the laws fall foul of the company’s privacy promises.

By for Zero Day

Last year, the company pushed back on a court order that demanded it build custom software that would crack the encryption on a terrorist’s iPhone. Apple refused, arguing the precedent could be used again on other devices, potentially putting all iPhones at risk. The company had mixed but strong political and legal support in favor of its case, and the matter went to court. The day before a critical hearing, the FBI dropped its case when it found hackers able to access the data in spite of Apple’s refusal.

“They talk big about Trump, but cave instantly to real dictators.”

— Glenn Reynolds

Then, this week, Apple acquiesced to China’s demands to remove almost every VPN provider — used to bypass China’s strict online censorship — from the country’s app store, following a change in the law.

ExpressVPN said in a statement it found Apple’s decision “surprising and unfortunate”, while StarVPN said in a tweet that the move sets a “dangerous precedent” that could allow other countries to follow suit.

There was confusion and anger. Why will Apple fight a court order against a particular device when it pulls VPN apps for human rights activists in China? How can Apple argue that the FBI breaking into a single iPhone is more detrimental to user security than reducing the security for an entire country? And what happens when the UK, or Australia, and others, ask of the same or similar demands?

These are fair questions for the company, which outwardly prides itself on providing privacy and security.

“WE FOLLOW THE LAW”

For more than a year, China has warned VPN providers that they would need a state-sanctioned license to continue operating. Beijing is on an information crackdown ahead of the Chinese leadership reshuffle, expected later this year, because VPNs are used to skirt the country’s so-called “Great Firewall” state censorship.

China’s information ministry finally enacted the rule on July 30, making the majority of VPN services illegal in the country overnight — forcing Apple to act or face consequences.

Apple boss Tim Cook defended the move on a post-earnings call on August 1, saying the company would rather not remove the apps, “but like we do in other countries, we follow the law wherever we do business.”

There’s a great sense of unease and mixed feelings on what Apple should have done — stand up to Beijing, profits be damned or not — and every argument seems to have an equally compelling counterpoint.

China makes up some 17 percent of Apple’s revenue — about $8 billion — as of its third-quarter earnings. But with that figure in double-digit decline year over year, Apple can’t afford not to play ball in the region. Where Western companies fail, Chinese companies often pick up the slack. Apple also recently opened a data center in the country to comply with China’s new cybersecurity rules, reaffirming its commitment to the region.

The other argument is that pulling out of the region would leave millions stranded with phones that can no longer access cloud-based and messaging services built into the phones. Is Apple willing to give up billions in revenue and isolate its customers for the sake of a few VPN apps? In any case, any criticism or rebuke from Apple wouldn’t change Beijing’s mind. Instead, it would likely antagonize the situation with a world power that doesn’t take well to criticism.

Given the circumstances Apple found itself in last year when it launched a legal fight against the FBI over the San Bernardino shooter’s phone, many have reacted angrily to its apparent about-face … (read more)

via ZDNet

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