Beijing's harassment of Apple is increasing. In the capital of movie piracy, a state-owned broadcaster is suing the American company for violating its copyright on a 20-year-old propaganda flick. There's a message here, and it's not that the Chinese government is suddenly serious about protecting intellectual property.
To recap, Chinese regulators shut down Apple's iBooks and iTunes Movies services in April. In the past few months, Apple also lost a couple of egregious cases in China involving rip-offs of its designs and trademarks.
The latest case is telling because if a violation of copyright occurred, Apple was an innocent bystander. The movie, "Bloody Fight With the Fierce Enemy," was available on an app that connected to Youku, a Chinese Youtube imitator. But the State Administration of Press, Publication, Radio, Film and Television is going after Apple and an app developer instead of the Chinese video-sharing site.
Apple wanted to expan d its services in China so it could provide the same integrated experience available to Apple users elsewhere. But the Chinese state is signaling in its usual passive-aggressive manner that a foreign technology company won't be allowed to compete on equal terms. Control of information is the key. Google, Facebook FB -0.63 % and Twitter TWTR 1.18 % are blocked in China so domestic imitators can occupy the same market niches. They carry out the state's censorship instructions and inform on users without complaint.
Apple revealed in April that for the past two years it has refused requests from Chinese authorities to share its encryption code. So it's no wonder Beijing wants to promote a domestic version of the open-source Android phone system that enables easy surveillance.
Apple likely sealed its fate in China in February when it refused to help the FBI hack the iPhone 5C of dead terrorist Syed Rizwan Farook. Farook and his wife murdered 14 people in San Bernardino, Calif., before the police killed them, but the company objected to a court order and insisted it would never defeat its own security features.
This no doubt caught the attention of Beijing's cyberwarriors. If terrorists use Apple products to evade capture in the U.S., human-rights lawyers and labor activists can do the same in China. W ithin two months Beijing turned hostile to Apple, and sales fell 26% in the second quarter. Investor Carl Icahn sold his Apple stock in April, saying he was worried about the Chinese government's attitude toward the company.
Apple may have to accept that using privacy as a selling point means it will lose ground in its second-biggest market. The U.S. can complain that China is again violating World Trade Organization rules. But in Beijing the Communist Party's grip on power trumps everything.
Source: China Keeps Squeezing Apple
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