China is making the internet less free, and US tech companies are helpingNovember 2, 2018
China’s restrictive internet policies are been actively exported around the world, according to a new report by non-profit organization Freedom House published yesterday. Freedom House, a bipartisan think tank funded primarily by the US government, says that China’s “digital authoritarianism” could threaten democracies in countries.
It’s the fourth year in a row that Freedom House has ranked China at the bottom for internet freedom. But at the same time that China’s internet remains a walled garden, companies like Apple, Microsoft, and Google are eagerly eyeing partnerships with Chinese businesses and increased expansion into the country. By not opposing China’s censorship policies directly and continuing to embrace the country, US tech companies are arguably legitimizing this restricted version of the internet that other countries are looking up to, Freedom House argues.
Even beyond Silicon Valley, China’s tech relationships extend far and wide. Uganda, Tanzania, and Vietnam have all consulted with China on cybersecurity measures. China also provides internet equipment and AI systems to a number of countries. Chinese Foreign Ministry spokesman Lu Kang denied the report’s claims to Reuters and called them “unprofessional and irresponsible.”
China also exerts its influence by holding internet conferences throughout the year, attended by representatives from 36 countries, in Southeast Asia and the Middle East. These conferences have been attended by major tech company executives, including Google CEO Sundar Pichai and Apple CEO Tim Cook. The World Internet Conference in eastern China promised to develop a “digital economy for openness,” in Cook’s words at the time, but as demonstrated by today’s report, that may not be so simple.
While doing business in China, US tech companies must play by local rules — or leave, as Google did in 2010. Sarah Cook, Freedom House’s senior research analyst for East Asia, tells The Verge that abiding by local regulation is a waste of time. “Rather than develop tailor-made products to comply with China’s draconian censorship rules, we believe tech companies’ resources and ingenuity would be better spent on helping users jump the Great Firewall and access the uncensored version of their products,” she says.
But most companies aren’t doing that. This August, Apple pulled 25,000 apps from its Chinese App Store, claiming they were “illegal” according to local law. In 2017, Apple removed VPN apps that people had used to elude Chinese censorship. When Apple launched the Product RED version of the iPhone 7 and 7 Plus in China, it removed any trace of the Product RED branding that’s designed to support AIDS-related charities, in what some critics say may have been a response to China’s anti-LGBT policies. Currently, LinkedIn restricts Chinese users from accessing politically sensitive profiles or posts from people outside the country. Microsoft’s Bing search engine still sanitizes Chinese language search results, nearly a decade after the New York Times first reported on it.
“American and international tech firms are caught between a rock and a hard place,” Cook says. “As they compete for profits and market share, they must navigate between the legal regimes and political demands emanating from Beijing on the one hand and values like free expression and user privacy on the other.”
Following Chinese regulations can come with a high price tag. Just look at major Chinese tech companies like Tencent, Alibaba, and Baidu, which have Party officials sitting on their boards. Sometimes the rules can appear arbitrary, like in August when Beijing ruled to limit new licenses for games, freezing out Tencent and rival gaming companies from putting out new products. Analysts put Tencent’s losses at as much as $1.5 billion, according to the Wall Street Journal. Baidu’s online video company iQiyi made a popular rap series only to be stymied by a ban on hip-hop culture and actors with tattoos in January. The show Rap of China, which had exceeded 2 billion views, was shelved and replaced by a reality dance show instead that hid tattoos from view.
Already, the rules are taking their toll on US companies. In an earnings call Thursday, Apple’s Tim Cook said that with China’s ban on new games, “things are not moving the way that they were previously” for App Store revenue in the country. And in following China’s latest laws on data localization, Apple, Evernote, and Airbnb all have had to transfer user data to servers overseen by local companies, often with direct government ties, opening themselves up to the risk of user privacy violations.
As US companies work to reach China’s nearly 1 billion internet users, the promise of profits seems to outweigh the dwindling of online freedom that it could help accelerate. Hundreds of US internet services in China are already blocked, and the ones that remain available have completely acquiesced to the government. While it’s possible that American companies will be able to grow in China without compromising their values, the experience of many US companies of late proves just how hard, if not impossible, that may be.