Chinese Developers File Antitrust Complaint Against Apple for ‘Monopolistic Behavior’

A group of 28 developers in China have enlisted a local law firm to file a complaint against Apple in a case alleging that the company engaged in "monopolistic behavior" during some of the actions it has taken to regulate the App Store in China (via The Wall Street Journal).

Lin Wei, an attorney with Dare & Sure Law Firm, filed the complaint this week and targeted Apple for removing apps from the App Store "without detailed explanation and charging excessive fees for in-app purchases." Wei said that Dare & Sure has spoken to different enterprises and received a "very strong response" from each, related to potential antitrust violations with Apple's App Store localization processes.
The complaint accuses Apple of engaging in monopolistic behavior by removing apps from the App Store without detailed explanation and charging excessive fees for in-app purchases. The complaint also alleges Apple doesn’t give details on why apps are removed and puts local developers at a disadvantage by not responding to queries in Chinese.

“There is a lack of transparency in the App Store operation,” Mr. Lin said. “At this stage, we think complaining to the Chinese regulators to get them involved is most ideal.”
According to Reuters, the case dates back to April of this year, when Dare & Sure invited developers to join and ended up with the 28 in question who are now part of the official complaint made this week. The law firm filed the complaint with two organizations that handle antitrust matters: China's State Administration for Industry and Commerce and the National Development and Reform Commission.

The details of what developers and which apps are involved in the complaint were not given, although an Apple spokeswoman mentioned in a brief comment to Reuters that app publishing remains consistent across all countries. There are some exceptions, however, when local laws force Apple to change its policies, most recently when the company pulled the majority of virtual private network apps from the App Store in China because of strict regulations in the country that require VPN apps to be authorized by the government.

In addition, the Apple spokeswoman said that the company is currently working on expanding its local developer relations team to help bolster app development in the country. Apple has faced issues in the past within China, particularly related to controversial content it has sold on the iTunes and iBooks storefronts, but earlier this year Apple CEO Tim Cook reiterated on the company's plans to continue investing in the country, telling local media, "We're here to stay."

Tag: China

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WeChat App in China Described as Apple’s ‘Toughest Rival’ as iPhone 8 Launch Nears

Apple's difficulty in garnering a larger share of the smartphone market in China has been looked at recently by The Wall Street Journal, which described the ubiquitous mobile app WeChat [Direct Link] as the iPhone's "toughest rival" in the country. Citing data from QuestMobile, on average WeChat is said to have captured nearly 35 percent of each user's monthly smartphone usage time, averaging about 1 billion monthly active users in total.

The problem for Apple is that WeChat is an entire ecosystem, with one app allowing users to pay for services, text, call cabs, watch videos, play mobile games, and access cloud-based "mini programs," or apps that don't need to be downloaded to a device to be used. Because all of these WeChat features are universal across smartphone brands, analysts speaking with The Wall Street Journal questioned whether or not Apple is "losing its edge" in China.


Specifically, Apple saw a sales drop in Greater China (including Hong Kong and Taiwan) in the first half of this past fiscal year, with revenue falling 13 percent in the period. According to analysts looking towards the launch of the iPhone 8, that device's success "largely depends on sales in China."
Skeptical investors are asking whether consumers in China will pay $1,000 for a new iPhone, when they spend more than 60% of their phone time inside a system from Tencent or from rivals Baidu Inc. and Alibaba Group Holding Ltd. “That’s the question: Is Apple losing its edge?” said Katy Huberty of Morgan Stanley, who remains optimistic about Apple’s prospects in China.
Apple has been making moves recently to focus on China, including naming Isabel Ge Mahe as vice president and managing director of Greater China, who is said to ensure that Apple's products and services appeal specifically to China users. Just this weekend, Apple also removed VPN apps from the China App Store, a move that could potentially help Apple gain favor with Chinese authorities.

Some iOS 11 features -- such as the new QR code scanner in the Camera app -- are also seen as a way for Apple to appeal to users in China who are used to having these abilities on hand with WeChat. If Apple doesn't continue to bolster its software, solely relying on upgraded hardware changes might not be enough to convince iPhone users to stick around, according to analyst Ben Thompson.
Tailoring software for the market could be critical to keeping the iPhone competitive. Otherwise, Mr. Thompson wrote, Apple runs the risk that the phone’s appearance becomes the only thing that matters when Chinese consumers buy a new device.

Such a shift potentially would force Apple to overhaul its entire business model, moving to a system where it releases a new-looking phone annually rather than every other year, as it does currently.
In terms of market share, market research firm Warren Capital noted that Apple and the iPhone have taken fourth place in China, behind Oppo, Vivo, and Huawei. Apple dropped to fifth place in terms of smartphone devices shipped in Q4 2016 (with Xiaomi added into the mix along with the previously mentioned Chinese brands), and in April Kantar Worldpanel's data noted that iOS dropped to its lowest share of the China smartphone market since 2014.

Thompson points to WeChat as a major reason only 50 percent of China-based iPhone owners stayed with Apple when purchasing a new phone, while in other countries that number is closer to 80 percent on average. Since users spend so much time within WeChat and rarely see any other advantages to owning an iPhone, the app "has turned Apple into just another vendor in China," which analysts see as particularly problematic for Apple as the iPhone 8 launch grows nearer.

During a visit to China earlier in the year, Apple CEO Tim Cook told local media outlet Caixin, "We're not just someone who's here to access the market. We've created almost 5 million jobs in China. I'm not sure there are too many companies, domestic or foreign, who can say that." Ultimately, Cook said that Apple isn't afraid of the challenges it faces in China, telling the site that Apple is "here to stay."

Related Roundups: iPhone 7, iPhone 8
Tags: China, WeChat

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Apple Pulls VPN Apps From China App Store As Russia Signs Law Banning Their Use

Russia has banned VPNs and other software that enables users to gain anonymous access to websites. The new law was signed by President Vladimir Putin on Monday and will come into effect on November 1st (via TechCrunch).

Leonid Levin, chairman of the Duma's committee on information policy and technology, was quoted by state-run media as saying that the new law is not targeted at "introducing new bans for law-abiding citizens" but aims to prohibit access to illegal content.

However, privacy advocates see the law as another way for the Russian government to restrict access to political content that it disagrees with. In 2015, it became mandatory for all user data from Russian citizens to be stored in Russian-based servers, and last year another law was passed making it necessary for internet service providers to retain traffic data for up to a year.

Recently the government threatened to block access to the Telegram encrypted messaging platform unless the company that runs the app provides more information about itself.

Elsewhere, virtual private networks took another blow over the weekend, as reports emerged that Apple has removed the majority of VPN apps from the App Store in China, following regulations passed earlier in the year that require such apps to be authorized by the Chinese government.

The action was first revealed by ExpressVPN, a provider based outside of China. The company said in a blog post that "all major VPN apps" including its own had been removed from the App Store. It also shared a note from Apple explaining that its app was removed because "it includes content that is illegal in China".
"We're disappointed in this development, as it represents the most drastic measure the Chinese government has taken to block the use of VPNs to date, and we are troubled to see Apple aiding China's censorship efforts. ExpressVPN strongly condemns these measures, which threaten free speech and civil liberties," ExpressVPN wrote on its blog.
A few hours later, Apple shared a statement with TechCrunch explaining its decision to pull the apps from its App Store in China:
Earlier this year China’s MIIT announced that all developers offering VPNs must obtain a license from the government. We have been required to remove some VPN apps in China that do not meet the new regulations. These apps remain available in all other markets where they do business.
Earlier this month, China reportedly started blocking some features of the WhatsApp messaging service, as authorities continued to tighten controls over the country's internet.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Tags: China, Russia, VPN

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Apple Reportedly Working With Chinese Manufacturer of Electric Vehicle Batteries

Apple is quietly working with Chinese battery manufacturer Contemporary Amperex Technology Limited on automotive battery research and development, according to Shanghai-based news group Yicai Global.


The report, citing unnamed sources, claims the two companies have signed a confidentiality agreement to work together on a "scheme" related to the field of batteries, but no specific details were provided.

CATL was founded in 2011 as a spinoff of Amperex Technology Limited, said to be the largest battery supplier for Apple's consumer electronics products, so the two companies already have an established business relationship. However, the companies have not publicly confirmed that they are working together.

The company, based in Ningde, China, describes itself as a leader in lithium-ion battery research and development, including battery cells, materials, and recycling. CATL says it currently has more than 3,700 full-time R&D personnel from a number of well-known universities and laboratories around the world.

CATL claims it has been the world's third largest manufacturer of hybrid and electric vehicle batteries for the past two consecutive years, behind Chinese rival BYD and Panasonic, which supplies Tesla with batteries. The company's lithium-ion batteries are used in both passenger vehicles and buses.

The scale of Apple's involvement with CATL remains unknown, but the company has reportedly been testing self-driving vehicle software using a fleet of Lexus SUVs, which have recently been seen on streets in California.

Last year, Apple reportedly abandoned plans for its own electric vehicle, at least temporarily, after reports persisted for nearly two years about the so-called Apple Car, said to have been codenamed Project Titan internally. In recent months, Apple has emphasized its interest in autonomous technologies.

"We're focusing on autonomous systems," said Tim Cook, Apple CEO, in an interview with Bloomberg Television's Emily Chang last month. "It's a core technology that we view as very important."

CATL plans to increase its battery output to 50 gigawatt hours by 2020, which could make it one of the industry's two largest manufacturers. The other, Tesla, expects total output from its Gigafactory in Nevada to reach at least 35 gigawatt hours, with the potential for up to 150 gigawatt hours, by 2020.

The company's other goals by 2020 include significantly reducing battery costs, improving energy density, and increasing the speed of charging. Last year, it demonstrated a 4C fast-charging solution that takes only 15 minutes to charge a lithium-ion electric vehicle battery to the 90 percent level.

Related Roundup: Apple Car
Tags: China, CATL, yicaiglobal.com

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WhatsApp Video and Photo Messages Reportedly Blocked in China

China has reportedly started blocking some features of the WhatsApp messaging service, as authorities continue to tighten controls over the country's internet.

WhatsApp users began reporting problems with sharing content on the chat platform yesterday, with many unable to send video and pictures. Despite initial fears of a communications-wide ban of the Facebook-owned service, text-based messages within the app appear to be unaffected.

WhatsApp's reach in China is small compared to homegrown chat service WeChat, which boasts 900 million users but is routinely subjected to state monitoring and censorship. However, Chinese users concerned about privacy have increasingly turned to the encrypted WhatsApp platform to communicate with friends and relatives as well as businesses abroad.

Facebook and Instagram have remained blocked by China's Great Firewall since 2009 and 2014, respectively. Encrypted messaging service Telegram was also blocked inside China after it became popular with the country's human rights lawyers, while several domestic VPNs – which are commonly used to evade censorship and access services abroad – were recently shut down after authorities said they were unauthorized to run.

China appears to be clamping down on potential sources of politically sensitive news as it prepares for a major leadership reshuffle in Beijing. The event happens every five years and often leads to a tightening of online controls to project an air of stability in the country. The death of jailed Nobel peace prize laureate Liu Xiaobo last week also spurred censors into action, with commemorations on WeChat reportedly blocked by authorities.

(Via The New York Times.)

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Tags: China, WhatsApp

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Apple Names Isabel Ge Mahe as New Managing Director of Greater China

Apple today announced that Isabel Ge Mahe, the current vice president of wireless technologies, has been made the vice president and managing director of Greater China. In her new role, Mahe will report directly to Apple CEO Tim Cook and COO Jeff Williams.

According to Apple, Mahe, who has led Apple's wireless technologies software engineering teams for nine years, will provide leadership and coordination across Apple's China-based team.

"Apple is strongly committed to invest and grow in China, and we are thrilled that Isabel will be bringing her experience and leadership to our China team," said Tim Cook, Apple's CEO. "She has dedicated a great deal of her time in recent years to delivering innovation for the benefit of Apple customers in China, and we look forward to making even greater contributions under her leadership."
As VP of wireless technologies, Mahe has focused on the development of cellular, WiFi, Bluetooth, NFC, and location and motion technologies for nearly all of Apple's products. She has also previously been in charge of the engineering teams developing Apple Pay, HomeKit, and CarPlay, and she has worked closely with Apple's R&D team and carrier partners to bake China-specific features into the iPhone and iPad.

She has overseen the addition of QR Code support in iOS 11, SMS fraud prevention services exclusive to China, and the feature that allows Apple customers to use a phone number as an Apple ID.

In a statement, Mahe said she is honored to represent Apple in China. "Everyone at Apple is proud of the contributions we make to the communities where we do business, and I am looking forward to deepening our team's connections with customers, government and businesses in China to advance innovation and sustainability," she said.

China has become an increasingly important market for Apple over the course of the last few years, and Mahe's appointment comes as the company struggles to maintain iPhone sales momentum in the country. In the second quarter of 2017, revenue in China was at $10.7 billion, down from $12.5 billion in the year-ago quarter.

Mahe will begin working in her new position, which is based in Shanghai, later this summer.

Tag: China

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Apple Launches Large-Scale Apple Pay Promotional Campaign in China

Apple today launched a large-scale promotion in China offering special discounts for consumers who use Apple Pay, in the company's latest bid to counter the dominance of rival digital wallets in the country.

Between July 18 and 24, Apple device owners who use the mobile payment system to make purchases in participating merchants across mainland China will receive concessions of up to 50 percent and as much as 50 times the usual number of reward points for credit cards, according to Apple's official Chinese website.


A total of 28 brick-and-mortar retail outlets are named in the campaign, including supermarkets and restaurants such as 7-Eleven, Watsons, Burger King and Starbucks, while 16 online merchants such as JD.com are also participating, with discounts varying between businesses.

In addition to retailers, 17 Chinese banks are also getting involved, offering up to 50 times the usual amount of reward points accrued when transactions are made using credit cards registered with Apple Pay.

The Apple Pay promotion is the largest of its kind to date in China, where third-party mobile payments are dominated by Alibaba Group and Tencent Holdings, which run Alipay and WeChat Pay, respectively. The rival digital wallets work on various phone brands, whereas Apple Pay, which debuted in China in February 2016, is limited to iOS devices and Apple Watch.

That presents a challenge for Apple, which has struggled to shift iPhones in China. The company shipped 9.6 million units in the first quarter, down 26.7 percent from a year earlier. It also recorded a 9.2 percent share of the smartphone market in Q1 2017, down from 12.7 in the first quarter of 2016.

Users can find the full list of merchants participating in the latest promotion on Apple's website.

(Via South China Morning Post.)

Related Roundup: Apple Pay
Tag: China

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Apple Announces China Data Center Will Comply With New Cybersecurity Law

Apple has announced it is setting up its first China data center in partnership with a local internet services company, in accordance with the country's new cybersecurity laws introduced last month.

Apple told Reuters on Wednesday that the data center would be built in the southern province of Guizhou with data management firm Guizhou-Cloud Big Data Industry (GCBD) as part of a planned $1 billion investment in the province.

"The addition of this data centre will allow us to improve the speed and reliability of our products and services while also complying with newly passed regulations," Apple said in a statement. "These regulations require cloud services be operated by Chinese companies so we're partnering with GCBD to offer iCloud," it said, referring to its online data storage service.
According to Reuters, Apple is the first foreign tech firm to announce amendments to its data storage arrangements in China after a new cybersecurity law was implemented in June which requires foreign firms to store data within the country. Other tech firms with data centers in China include Microsoft and Amazon, which will also need to comply with the new rules.

Overseas business groups have been critical of the law's strict data surveillance and storage requirements, which they say are overly vague and burden companies with excessive compliance risks, threatening proprietary data. Authorities say the law is not designed to put foreign firms at a disadvantage and was introduced as a response to the threat of cyber attacks and terrorism.

Apple assured reporters it had strong privacy and security protections in place. "No backdoors will be created into any of our systems," said a company spokesman.

Earlier this week, Apple announced it was building a second data center in Denmark run entirely on renewable energy. The company said a planned data center in Athenry, Ireland, announced in 2015, had yet to begin construction and is awaiting judicial review.

Tag: China

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Popular Mobile VPN Services Shut Down in China

A popular virtual private network service has been forced to close in China on orders from the government, it emerged on Monday. Bloomberg reported that GreenVPN sent a notice to its customers saying it would end the service from July 1 after "receiving a notice from regulatory departments".

VPNs route and encrypt internet traffic to servers outside of the country, making them popular with users in China who have limited access to online content because of government restrictions. VPNs allow access to sites like Facebook and Twitter, which are otherwise blocked by China's "Great Firewall".

Some users of the GreenVPN iPhone app reported that the service failed to load over the weekend. Apps for GreenVPN and SuperVPN are still listed in the App Store, but users reportedly had trouble downloading them or turning them on. Bloomberg was unable to contact SuperVPN's offices, while Apple didn't immediately respond to requests for comment.

It's unknown whether the timing of the VPN shutdown is related to the politically sensitive 20th anniversary of the handover of Hong Kong from Great Britain to China. In January, China's Ministry of Industry and Information announced new priorities for controlling online content which included restrictions on VPNs.

Last year, Apple faced its own issues with Chinese state regulators regarding a controversial independent movie which led to the shut down of iTunes and iBooks in the country.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Tags: China, security

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Apple Officially Allows Users to Tip Content Creators With In-App Purchases

Apple updated its App Store Review Guidelines this week to indicate that developers may now sell virtual currencies in the form of in-app purchases to enable customers to "tip" content creators within apps.


Like all other in-app purchases, Apple will now receive a 30 percent cut from the virtual currencies used for tipping.

Tipping within apps is popular in China, where live-streaming apps like Yinke and Yizhibo have long allowed viewers to tip or give virtual gifts to the stars they watch as a token of gratitude, according to TechCrunch.

Last month, however, Apple reportedly told WeChat and several other Chinese social networking apps to disable their "tip" functions to comply with App Store rules, as many of the virtual currencies sidestepped Apple's 30 percent cut on purchases.

Now that Apple has formally outlined its stance on the matter, developers who previously feared repercussions from the company may be more inclined to begin offering virtual currencies for users to tip content creators with.

Beyond Apple's 30 percent cut, it's up to developers to determine how much of the tips are relayed to the content creators themselves.


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