Apple to set up its first data centre in China

Apple's first bite in China: Why is it choosing to set up its first data hub on the mainland?
Read more: http://on.ft.com/2ud5Rsx



Apple to set up its first data centre in China Move reflects concessions foreign companies must make to tap mainland market Read next EU regulators bar social media searches on jobseekers Apple’s move follows Beijing’s introduction last month of tighter cyber security rules © Bloomberg Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) 14 Save YESTERDAY by: Tim Bradshaw in San Francisco and Emily Feng in Beijing Listen to this article Pause 00:01 04:10 Powered by FT Labs Text-to-Speech Find more articles to listen to Personal online information belonging to Chinese owners of iPhones and iPads — including private messages, photos and device backups — is to be stored locally in China for the first time, as Apple opens its first iCloud data centre on the mainland. Apple’s move follows Beijing’s introduction last month of tighter cyber security rules and reflects the concessions foreign multinationals must make to tap the world’s largest mobile market, which is increasingly important for iPhone sales.  The US tech group’s new facility in Guizhou will be jointly operated with a Chinese internet company, as part of a $1bn investment in the southwestern province.  Announcing the relocation of mainland Chinese customers’ iCloud data from the US, Apple sought to head off potential security concerns from its tens of millions of users in the region.  “As our customers know, Apple has strong data privacy and security protections in place and no backdoors will be created into any of our systems,” it said in a statement.  Apple already complies with legally valid requests for data from law enforcement authorities around the world, including China. Nonetheless, moving customers’ iCloud data to a Chinese facility will make it easier for the authorities to go through the legal motions required to obtain that private information.  Under US law, foreign governments have to undertake a process, which can sometimes take years, to obtain data about their citizens that are stored on servers in the US. China’s new cyber security law requires all data collected on the country’s citizens or areas relating to broadly defined issues of national security to be held on servers in China. Transfers of data abroad must first be reviewed and approved by regulators. Until now, Apple has serviced its Chinese iCloud customers using data centres outside the country, primarily in the US. Some Apple media systems, including parts of its iTunes and iBooks digital content stores, were transferred to servers in China a few years ago, but those systems did not include any personal data.  Related article China’s cyber security law rattles multinationals Businesses warn rules will increase costs and leave them more vulnerable to spying Last year, Apple fought a request by the US government to break down the encryption protections built into its iOS operating system, as investigators sought to access a dead terrorist’s iPhone. Apple also said last year that it had rejected a Chinese demand that it hand over its iOS source code.  The Chinese law means Apple must store its iCloud encryption keys there securely. Apple will retain control of the keys but, in certain instances, such as credit card information, only the user holds the key to their data, meaning the iPhone maker would be unable to comply with any request from law enforcement.  Other US tech groups including Microsoft, IBM and Amazon already offer their cloud infrastructure services in China through local partners. Google has not sought to place any data centres in China. US tech companies have been wary of storing their users’ data in China ever since Yahoo was caught up in controversy surrounding the jailing of two Chinese dissidents in the mid-2000s. Yahoo was criticised by US politicians and human rights activists for handing over emails to the Chinese authorities in both cases. After facing lawsuits from their families, co-founder Jerry Yang was forced to apologise at a US congressional hearing in 2007.  “It’s not a new direction. China has been increasingly requiring different types of data be stored within China,” said Mark Natkin, managing director at Marbridge Consulting. “It’s indicative of an effort China is making to ensure that user data from online and mobile services provided to Chinese users is stored in data centres in China.”  Additional reporting by Yuan Yang Copyright The Financial Times Limited 2017. All rights reserve