The newspaper said it reviewed internal documents, recent filings in a court case, interviewed 17 current and former Apple employees, and spoke to four security experts, all which revealed the extent CEO Tim Cook moved the company toward greater capitulation to Chinese government demands for access to its citizens’ private data. It found that not only is Apple giving access to encryption keys for customers’ data on the iCloud to government-owned firm; It is ceding control of the massive server farms that host its cloud computing for the Chinese firm to manage.
From the Times report:
Two decades ago, as Apple’s operations chief, Mr. Cook spearheaded the company’s entrance into China, a move that helped make Apple the most valuable company in the world and made him the heir apparent to Steve Jobs. Apple now assembles nearly all of its products and earns a fifth of its revenue in the China region. But just as Mr. Cook figured out how to make China work for Apple, China is making Apple work for the Chinese government.
Mr. Cook often talks about Apple’s commitment to civil liberties and privacy. But to stay on the right side of Chinese regulators, his company has put the data of its Chinese customers at risk and has aided government censorship in the Chinese version of its App Store. After Chinese employees complained, it even dropped the “Designed by Apple in California” slogan from the backs of iPhones.
The article notes that Chinese workers — with recent reports claiming that some of them are slave laborers — manufacture nearly all of Apple’s products, and that the company generates $55 billion per year from the country. That’s more than any other American corporation generates from China, according to the Times report.
The genuflection to Chinese authorities is a hypocritically bad look for Cook and Apple, which resisted helping the FBI access iPhones of terrorist attackers in Pensacola, Fla. and San Bernardino, Calif. Cook also has a long-running feud with Facebook CEO Mark Zuckerberg over the rights to privacy for tech customers.
For its report the New York Times interviewed Doug Guthrie, who Apple hired in 2014 to help greatly expand its presence and manufacturing in China, “which involved millions of workers, thousands of plants and hundreds of suppliers.” He said the Chinese government spent billions of dollars on roads, labor recruitment, and factory construction, power plants and employee housing.
“This business model only really fits and works in China,” he told the Times. “But then you’re married to China.”