In April, the founder of multibillion dollar Chinese startup Bytedance made a striking public statement. “Our product took the wrong path, and content appeared that was incommensurate with socialist core values,” Zhang Yiming said, in a message widely distributed by state-controlled media. He pledged that Bytedance would work harder to “promote positive energy and to grasp correct guidance of public opinion.”
Zhang’s grovelling apology came after Chinese authorities temporarily removed Bytedance’s Toutiao news aggregator from app stores for featuring “vulgar” content. Three weeks later, the app, which has more than 100 million users, was restored.
China’s internet market is much larger and more lucrative than when Google pulled its desktop search app and withdrew from the country eight years ago after phishing attacks targeted Chinese activists using Gmail. The country now has more than 770 million internet users, most of whom access it via a device running Google’s open source Android mobile operating system. But the demands China’s government places on internet companies have grown significantly, too.
“China’s regulatory environment is more restrictive than in 2010,” says Lotus Ruan, who tracks online information controls in the country for the University of Toronto’s Citizen Lab. “In the name of ‘rule of law,’ the state is releasing more and more laws and regulations to control internet activities.”
The prospect of Chinese riches has lured other tech companies. Apple’s iPhone has long been popular in the country; the company attributed nearly one-fifth of the $55 billion quarterly revenue it reported last week to China. LinkedIn agreed to censor its content when it entered the country in 2014. And The New York Times reported last month that Facebook has been trying to open a China office.
Google may face political trouble at home too. Six US senators wrote to Google CEO Sundar Pichai Friday asking him to explain the company’s plans regarding China. The letter said any plan to launch services in the country “risks making Google complicit in human rights abuses related to China’s rigorous censorship regime.”
China’s public would probably be open to trying services from Google, says Paul Triolo, who tracks Chinese technology markets and policy at Eurasia Group. “From Chinese users’ point of view, these services could be beneficial, I would argue that they would probably have a lot of users,” he says.
But if Google goes ahead, it will have to comply with a broad new cybersecurity law introduced last year. That law imposes some of the country’s first rules to protect consumers from corporate invasions of privacy—and restrictions on tech companies that place consumer data more easily within government reach. In addition, the government has ordered companies to store data for longer periods, and tightened enforcement of a rule requiring online accounts match a person’s real identity.
Implementation of the sweeping new regulations is ongoing, but it has already forced notable changes in how Chinese and US tech companies operate. One provision of the law restricts transfers of data out of the country, keeping the information within easier reach of authorities. Another mandates that cloud services must be operated by Chinese companies.
It’s why Apple in February transferred management of the Chinese version of its iCloud service that stores data such as messages and photos—and the encryption keys securing them—to a state-controlled company. Chinese authorities used to have to go to Apple to gain access to its users’ data. Now they may not. Bloomberg reported Friday that Google hopes to offer cloud services in China, out of data centers run by local companies.
Google’s business and product plans are unconfirmed, making it hard to know exactly which parts of China’s regulations would apply. What’s been disclosed suggests the company would possess user data that could be alluring to Chinese authorities enforcing the country’s controls on political expression.
That could force Google to play an active role in unsavory policies. In 2005, writers Wang Xiaoning and Shi Tao were sentenced to 10 years in prison for, respectively, promoting democracy and leaking Communist Party documents, after Yahoo disclosed their personal data to the Chinese government. The company later settled a lawsuit brought by Shi’s family.
In the US and other markets, Google’s ad business relies on building rich profiles of people’s online activity such as web searches, which are used by advertisers to target their audience. Google could conceivably operate a search app without such profiles, by showing ads based solely on the query a person entered. But Google also plans to launch a personalized news-aggregation app in China, according to The Information.
Hundreds of millions of people in China already use such services, such as Toutiao, which employ machine learning to customize a user’s content. To compete, Google would probably need to collect rich profiles on its users, says Graham Webster, a senior fellow with the Paul Tsai China Center, at Yale. “The company would be holding data that would show what users are interested in reading,” says Webster. “If a new topic became newly sensitive, theoretically the authorities could ask to see who has been accessing that information.”
Figuring out what authorities could ask for could become a constant headache for Google executives, were the company to offer new services in China.
US government demands on Google and other tech companies may not always be transparent, as the Snowden revelations showed. But they generally come via a known legal process that gives companies some mechanism by which to object. Chinese authorities do use court orders and regulations to request data from companies. They also use surveillance, and apply informal and secretive pressures that can be unpredictable, says Ruan, of Citizen Lab. “The challenge for Google is that many of these laws are vaguely defined and often subject to interpretations by the authorities,” she says.
Bytedance’s public humiliation this spring helps illustrate that point. The company’s travails began with criticism of its services from state media, including complaints that a video app hosted clips of unmarried teenage moms discussing their lives, something China Daily said “does not accord with traditional values.”
Before Google can launch apps, it would need approval from the Cybersecurity Administration of China, which regulates the internet, as well as political clearance from the very top of China’s government.
Last week’s reports suggest Google’s making progress on both fronts. Company staff are said to have demonstrated versions of search and news apps to regulators. The Intercept says Pichai met last December with Wang Huning, a member of the Chinese Politburo. Wang is a top adviser to President Xi Jinping on matters of both ideology and cyberspace, says Eurasia Group’s Triolo. “He’s the guy you’d have to get approval from, basically,” he says.
Triolo and others watching Chinese-US relations in technology believe approval is unlikely to come soon. The ongoing trade war instigated by President Trump would make Google launching new services in China politically unwelcome on both sides of the Great Firewall.
Critics of China’s internet controls don’t find that very consoling. Google’s steady series of quieter, public moves to expand its presence in China suggest the company isn’t about to give up. Google opened an AI research lab in Beijing last year, has invested $500 million into leading online retailer JD.com, and last month launched an AI-enhanced drawing game on dominant mobile messaging platform WeChat. “The problem lies in the uncertainty in how much Google would appease the state for growth and profits,” Ruan says.
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This article was syndicated from wired.com