Apple cut deal with Beijing government to protect Chinese business lines: report

U.S. tech giant Apple Inc. cut a deal with Chinese officials to protect its business lines in the country, working with government regulators on rules that would allow the company to operate more freely in the country while supporting key government priorities, according to a published report.

According to a story on the The Information.com, citing what the news website said were internal company documents and records, Apple CEO Tim Cook starting in 2016 systematically lobbied Chinese regulators for exemptions to rules being laid down for foreign smartphone makers that would have hurt iPhone sales as well as such company offerings as Apple Pay, iCloud and the App Store.

The move to woo Chinese officials personally came after regulators shuttered iTunes books and movies that year, one Apple insider told the website.

Through the duration of the alleged agreement, Apple has invested heavily in China from 2016 through 2021, with the accord automatically extending for at least another year if both sides agreed. The Information.com said the deal overall was worth $275 billion for Apple, but did not detail how it came up with that figure.

Mr. Cook and Chinese officials hammered out an 1,125-word agreement committing the company to fostering a number of Chinese government initiatives, including the promotion of “the most advanced manufacturing technologies” and underwriting the training of “high-quality Chinese talents.”

Apple, which recently became the single biggest cellphone seller in China, also pledged to use more Chinese software and local tech firms.

The Washington Times has reached out to Apple for comment on the report, but the company has yet to make a public statement.

The company strongly denied a report this spring in the New York Times that it had compromised the security and privacy controls of its iCloud data storage service by agreeing to cooperate with Chinese regulators.

The Hong Kong-based reporter on The Information.com report was a Wall Street Journal correspondent in the region for a decade before joining the news website.