Apple starts to store user data on servers in China for first time
Andy Wong/APShoppers at an Apple store in the Wangfujing shopping district in Beijing.
By Gerry Shih and Paul Carsten

BEIJING -- Apple has begun keeping the personal data of some Chinese users on servers in mainland China, marking the first time that the tech giant is storing user data on Chinese soil.

The data will be kept on servers provided by China Telecom, the country's third-largest wireless carrier, Apple (AAPL) said in a statement Friday.

Apple attributed the move to an effort to improve the speed and reliability of its iCloud service, which lets users store pictures, email and other data. It also coincides with Apple's bid to support its iTunes Store in China, where local downloads of audio and video have been steadily increasing.

The storage of user data in China represents a departure from the policies of some technology companies, notably Google (GOOG), which has long refused to build data centers in China due to censorship and privacy concerns.

"Apple takes user security and privacy very seriously," it said. "We have added China Telecom to our list of data center providers to increase bandwidth and improve performance for our customers in mainland China. All data stored with our providers is encrypted. China Telecom does not have access to the content."

The encryption keys for Apple's data on China Telecom servers would be stored offshore and not made available to China Telecom, a person familiar with the situation said.

Apple has claimed to have devised encryption systems for services such as iMessage that even Apple itself can't unlock. But some experts expressed skepticism that Apple would be able to withhold user data in the event of a government request.

"If they're making out that the data is protected and secure that's a little disingenuous because if they want to operate a business here, that'd have to comply with demands from the authorities," said Jeremy Goldkorn, director of Danwei.com, a research firm focused on Chinese media, Internet and consumers.

"On the other hand if they don't store Chinese user data on a Chinese server they're basically risking a crackdown from the authorities."

Goldkorn added that data stored in the United States is subject to similar U.S. regulations where the government can use court orders to demand private data.

A spokesman for China Telecom declined to comment.

Google, Microsoft

Technology companies seek to position data centers as close to their customers as possible because smaller physical distances mean faster service speeds.

But some companies have opted not to situate servers in China, where they would have to comply with local laws. Google and Microsoft (MSFT) don't have servers for their Gmail and Hotmail services in China.

Google publicly abandoned China in 2010 and moved its services, including its search engine, to Hong Kong-based servers after refusing to comply with Chinese government censorship.

Yahoo Inc came under criticism in 2005 after it handed to Chinese authorities emails that led to the imprisonment of Shi Tao, a journalist who obtained and leaked an internal censorship order the government had sent Chinese media.

Microsoft has seen its cloud storage service disrupted in China since early June. This development coincided with wider disruptions to overseas Internet services, including Google's, around the time of the 25th anniversary of pro-democracy protests in Beijing's Tiananmen Square.

"China doesn't want any digital service offered to Chinese people to be hosted offshore," said Goldkorn.

"I suppose it was inevitable that Apple had to comply if they were using foreign servers for Chinese user data."


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