Apple to Build China Data Center to Meet New Cybersecurity Law
Apple to Build China Data Center to Meet New
Cybersecurity Law
The iPhone maker’s compliance comes as it faces
increasing regulatory headwinds in China
By Alyssa Abkowitz and
Eva Dou Updated July 12, 2017 12:03 p.m. ET
BEIJING — To comply with tough new cybersecurity rules,
Apple Inc. will begin storing all cloud data for its China customers with a
government-owned company—a move that means relinquishing some control over its
Chinese data.
Apple will build its first Chinese data center in the
southern province of Guizhou to house data for customers of its iCloud service.
The data include photos, documents, messages, apps and videos uploaded by Apple
users throughout the mainland, the company said Wednesday.
The center will be operated by a company owned by the
Guizhou provincial government, and whose chairman was a local government
official until last year.
Under the agreement, Apple will retain control over
encryption keys at the data center. It wasn’t clear if it would have access to
any of the data itself, which would be overseen by its Guizhou partner.
In addition, Apple wouldn’t be able to transfer data from
Chinese customers to the U.S., in compliance with China’s new cross-border data
guidelines that were also part of the latest cybersecurity rules.
The announcement significantly expands a concession Apple
made to appease Chinese authorities in 2014, when it started storing some data
at facilities owned by state-owned China Telecom to dispel security concerns.
At the time, Apple said the move would improve performance for Chinese
customers.
Apple didn’t clarify which data was being stored under
that previous agreement, but under the new arrangement all of the iCloud data
for its customers in China will be stored in the country. Currently, Apple
pulls some iCloud data for Chinese users from servers in the U.S.
Apple said it made the latest change to comply with
China’s new rules on data storage and cloud-services operation that went into
effect June 1 as part of sweeping new regulations aimed at improving
cybersecurity. It also said the new data center would improve speed and
reliability for customers in China.
The Silicon Valley company has been one of the technology
industry’s strongest advocates for fending off government incursions into user
data. In a statement, Apple said it has “strong data privacy and security
protections in place and no backdoors will be created into any of our systems.”
The latest move comes as Apple has been facing increasing
regulatory headwinds in China. Last year, for example, its online book and
movie services was shut down by authorities, who didn’t give specific reasons
for the closing.
China also has ramped up pressure broadly on foreign
cloud-service providers over the past year to comply with longstanding rules
that require them to partner with local firms. Microsoft Corp. and Amazon.com
Inc. already have local partners.
“It’s clear that this is now being enforced across the
board,” said Chris DeAngelis, Beijing-based general manager of consultancy
Alliance Development Group. “Any cloud-based company coming into China has to
have a local operating partner.”
U.S. lawmakers sent a letter to China’s ambassador in
March, protesting the growing restrictions on foreign cloud-service providers.
Under the arrangement announced Wednesday, Apple’s China
users will transition to a cloud-storage service that will carry the brands of
both Apple and its Chinese partner, whose full name is Guizhou on the Cloud Big
Data Industry Development Co.
It is the first time iCloud has been co-branded. The
transition will occur over the next several years while the $1 billion data
project is developed.
Apple has said its encryption can’t be cracked, not even
by Apple itself, making the company one of the strongest defenders of user
privacy among major U.S. tech companies. Apple famously refused the FBI’s
demand that it unlock an iPhone owned by a gunman in the 2015 mass shooting in
San Bernardino.
Guizhou is one of China’s poorest provinces, and Beijing
has pushed economic development there to create more job opportunities. Chinese
President Xi Jinping plans to participate in the Communist Party’s leadership
conclave this fall as a Guizhou delegate, despite having few ties to the
province.
With Beijing’s backing, Guizhou is seeking to build a
big-data industry, and has attracted investments from other major tech
companies including Qualcomm Inc. and Foxconn Technology Group.
In a description of Guizhou on the Cloud, chairman Fu Yu
wrote that the company aims to “provide a platform for aggregation and sharing
of government data.”
Mr. Fu, the former government official, couldn’t be
reached for comment. An employee who answered the phone at the company said
Apple was its first international partner, but they hoped for more.
—Tripp Mickle in San Francisco contributed to this
article.
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