Amid continued tension between the United States and China, a new report from The Information details how Apple could be impacted by Chinese retaliation. Apple also continues to face pushback from Chinese regulators in regards to the App Store.
In the United States, the Trump Administration is threatening action against Chinese-owned TikTok and WeChat due to national security concerns. Because of this, the report explains that there is a “growing risk of a tit-for-tat” response on United States businesses in China.
The report also says that Chinese regulators have started closing loopholes that previously allowed Apple to operate its business in China, without the same rules and regulations that many other foreign and local rivals face. For instance, Apple has recently removed thousands of games for the App Store in China.
The Information also points out a situation involving the fate of the App Store as a whole in China. According to Chinese law, app stores are supposed to be joint ventures majority owned and operated by a Chinese partner. All applications from third-party developers must also be screened to follow local laws.
Apple has never followed this guidance, the report explains. Apple does not screen applications ahead of time, and third-party developers are not required “to get Chinese business or content licenses.” Other app stores in China do follow this guidance.
Apple had considered setting up a legal entity for the App Store in China in 2013, but Apple executives in Cupertino declined to do so at the time, believing that “such an act constituted a loss of control over the store.” Amid the China-US trade war in 2018, however, Apple registered the entity, but it has “been unable to get Chinese authorities to approve the application for the past two years.”
According to the report, the hold up is that regulators want the ability to approve what goes in the App Store:
According to people familiar with the matter, Chinese officials have said they won’t grant it until Apple makes more concessions that allow regulators to approve what goes into the App Store. However, Apple executives are reluctant to change its current practices as it would give Beijing more power over what apps it publishes in China, they said.
“Until the issue is resolved, there is a risk that Chinese regulators could shut down the China App Store, which contains nearly 1.5 million apps,” the report concludes.
The full report from The Information is well worth a read and focuses on Apple’s other struggles in China.
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