Amid continuing tensions between the United States and China, a new report from The information details how Apple may be affected by Chinese advertising. Apple also continues to push back from Chinese regulators in connection with the App Store.
In the United States, the Trump administration is threatening action against Chinese TikTok and WeChat, due to concerns about national security. Because of this, the report states that there is a “growing risk of a tit-for-tat” response across U.S. companies in China.
The report also says that Chinese regulators began to close holes that previously allowed Apple to operate its business in China, without the same rules and regulations as many other foreign and local rivals. For example, Apple recently unveiled thousands of games for the App Store in China.
The information also points to a situation involving the fate of the App Store as a whole in China. According to Chinese law, app stores are meant to be joint ventures that are majority owned and operated by a Chinese partner. All third-party developer applications must also be screened to comply with local laws.
Apple has never followed this guidance, the report explained. Apple does not pre-screen applications, and third-party developers are not required “to obtain Chinese business or content licenses.” Other app stores in China follow this guide.
Apple had thought about setting up a legal entity for the App Store in China in 2013, but Apple executives in Cupertino refused to do so at the time, believing that “such an act would delay a loss of control over the store.” ” However, in the middle of the Sino-US trade war in 2018, Apple registered the entity, but it is “unable to get Chinese authorities to approve the application for the last two years.”
According to the report, the hold up that regulators want is the ability to approve what goes on in the App Store:
According to people familiar with the matter, Chinese officials have said they will not grant it until Apple makes more concessions that regulators can approve what goes on in the App Store. However, Apple executives are not reluctant to change their 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 may close the China App Store, which contains nearly 1.5 million apps,” the report concludes.
The full report of The information is well worth a read and focuses on Apple’s other fight in China.
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