Apple moves to store iCloud keys in China, raising human rights fears

["Dave Farber" <farber () gmail com>]

https://www.reuters.com/article/us-china-apple-icloud-insight/apple-moves-to-store-icloud-keys-in-china-raising-human-rights-fears-id

Apple moves to store iCloud keys in China, raising human rights fears
Stephen Nellis
SAN FRANCISCO/BEIJING (Reuters) - When Apple Inc begins hosting Chinese users’ iCloud accounts in a new Chinese data 
center at the end of this month to comply with new laws there, Chinese authorities will have far easier access to text 
messages, email and other data stored in the cloud.

A man looks at the screen of his mobile phone in front of an Apple logo outside its store in Shanghai, China July 30, 
2017. REUTERS/Aly Song
That’s because of a change to how the company handles the cryptographic keys needed to unlock an iCloud account. Until 
now, such keys have always been stored in the United States, meaning that any government or law enforcement authority 
seeking access to a Chinese iCloud account needed to go through the U.S. legal system.

Now, according to Apple, for the first time the company will store the keys for Chinese iCloud accounts in China 
itself. That means Chinese authorities will no longer have to use the U.S. courts to seek information on iCloud users 
and can instead use their own legal system to ask Apple to hand over iCloud data for Chinese users, legal experts said.

Human rights activists say they fear the authorities could use that power to track down dissidents, citing cases from 
more than a decade ago in which Yahoo Inc handed over user data that led to arrests and prison sentences for two 
democracy advocates.  Jing Zhao, a human rights activist and Apple shareholder, said he could envisage worse human 
rights issues arising from Apple handing over iCloud data than occurred in the Yahoo case.

In a statement, Apple said it had to comply with recently introduced Chinese laws that require cloud services offered 
to Chinese citizens be operated by Chinese companies and that the data be stored in China. It said that while the 
company’s values don’t change in different parts of the world, it is subject to each country’s laws.

“While we advocated against iCloud being subject to these laws, we were ultimately unsuccessful,” it said. Apple said 
it decided it was better to offer iCloud under the new system because discontinuing it would lead to a bad user 
experience and actually lead to less data privacy and security for its Chinese customers.

As a result, Apple has established a data center for Chinese users in a joint venture with state-owned firm Guizhou - 
Cloud Big Data Industry Co Ltd. The firm was set up and funded by the provincial government in the relatively poor 
southwestern Chinese province of Guizhou in 2014. The Guizhou company has close ties to the Chinese government and the 
Chinese Communist Party.

The Apple decision highlights a difficult reality for many U.S. technology companies operating in China. If they don’t 
accept demands to partner with Chinese companies and store data in China then they risk losing access to the lucrative 
Chinese market, despite fears about trade secret theft and the rights of Chinese customers.

     BROAD POWERS

Apple says the joint venture does not mean that China has any kind of “backdoor” into user data and that Apple alone – 
not its Chinese partner – will control the encryption keys.  But Chinese customers will notice some differences from 
the start: their iCloud accounts will now be co-branded with the name of the local partner, a first for Apple.

And even though Chinese iPhones will retain the security features that can make it all but impossible for anyone, even 
Apple, to get access to the phone itself, that will not apply to the iCloud accounts. Any information in the iCloud 
account could be accessible to Chinese authorities who can present Apple with a legal order.

Apple said it will only respond to valid legal requests in China, but China’s domestic legal process is very different 
than that in the U.S., lacking anything quite like an American “warrant” reviewed by an independent court, Chinese 
legal experts said. Court approval isn’t required under Chinese law and police can issue and execute warrants.

“Even very early in a criminal investigation, police have broad powers to collect evidence,” said Jeremy Daum, an 
attorney and research fellow at Yale Law School’s Paul Tsai China Center in Beijing.  “(They are) authorized by 
internal police procedures rather than independent court review, and the public has an obligation to cooperate.”

    Guizhou - Cloud Big Data and China’s cyber and industry regulators did not immediately respond to requests for 
comment. The Guizhou provincial government said it had no specific comment.

There are few penalties for breaking what rules do exist around obtaining warrants in China. And while China does have 
data privacy laws, there are broad exceptions when authorities investigate criminal acts, which can include undermining 
communist values, “picking quarrels” online, or even using a virtual private network to browse the Internet privately.

Apple says the cryptographic keys stored in China will be specific to the data of Chinese customers, meaning Chinese 
authorities can’t ask Apple to use them to decrypt data in other countries like the United States.

Privacy lawyers say the changes represent a big downgrade in protections for Chinese customers.

    “The U.S. standard, when it’s a warrant and when it’s properly executed, is the most privacy-protecting standard,” 
said Camille Fischer of the Electronic Frontier Foundation.

WARNED CUSTOMERS

Apple has given its Chinese users notifications about the Feb. 28 switchover data to the Chinese data center in the 
form of emailed warnings and so-called push alerts, reminding users that they can chose to opt out of iCloud and store 
information solely on their device. The change only affects users who set China as their country on Apple devices and 
doesn’t affect users who select Hong Kong, Macau or Taiwan.

The default settings on the iPhone will automatically create an iCloud back-up when a phone is activated. Apple 
declined to comment on whether it would change its default settings to make iCloud an opt-in service, rather than 
opt-out, for Chinese users.

Apple said it will not switch customers’ accounts to the Chinese data center until they agree to new terms of service 
and that more than 99.9 percent of current users have already done so.

Until now, Apple appears to have handed over very little data about Chinese users. From mid-2013 to mid-2017, Apple 
said it did not give customer account content to Chinese authorities, despite having received 176 requests, according 
to transparency reports published by the company. By contrast, Apple has given the United States customer account 
content in response to 2,366 out of 8,475 government requests.

Those figures are from before the Chinese cyber security laws took effect and also don’t include special national 
security requests in which U.S. officials might have requested data about Chinese nationals. Apple, along with other 
companies, is prevented by law from disclosing the targets of those requests.

Apple said requests for data from the new Chinese datacentre will be reflected in its transparency reports and that it 
won’t respond to “bulk” data requests.

Human rights activists say they are also concerned about such a close relationship with a state-controlled entity like 
Guizhou-Cloud Big Data.

Sharon Hom, executive director of Human Rights in China, said the Chinese Communist Party could also pressure Apple 
through a committee of members it will have within the company. These committees have been pushing for more influence 
over decision making within foreign-invested companies in the past couple of years.

   

Reporting by Stephen NellisEditing by Jonathan Weber and Martin Howell




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