Apple’s China App Store shows video games as Beijing tightens Internet controls

Apple Inc.

AAPL -0.24%

launches thousands of video games from its platform in China as the government tightens its grip on such content, illustrating the technology giant’s vulnerability to state pressure on its operations.

The iPhone maker warned Chinese developers this month that a new wave of paid gaming apps could be removed from their app store, according to a memo released by The Wall Street Journal, after the company removed thousands of such apps earlier this year.

The Chinese government four years ago began demanding that video games be licensed before they were released, but developers were able to meet the requirement in Apple’s app store. Apple has not said why the loophole existed or why the company started closing it this year. Foreign software developers regret the change and cite difficulties in getting approval in China for their games.

The in-store cleanup comes as China intensifies its efforts to police its Internet, tighten content controls and censorship, including a demand that Tripadvisor and more than 100 other apps be removed from the Apple Store in the country. The Cyberspace Administration of China called the apps illegal without spelling out the crimes committed by Tripadvisor or other apps, most of which are from Chinese developers. Tripadvisor declined to comment.

The Cyberspace Administration of China, which regulates cyber security, and the National Radio and Television Administration, which approves video games, did not respond to requests for comment.

In China, the review of Apple’s app store highlights the delicate balance that Cupertino, California-based companies must strike when working to reach Chinese consumers while navigating official requirements.

Earlier this month, Apple told developers in a memo that premium games and those with in-app purchases had until Dec. 31 to submit proof of a state license.

“Only a small portion of these games will actually be licensed, as far as we can tell,” said Rich Bishop, CEO of ChinaInApp, which works with Western companies to bring their apps to China.

Trade tensions between China and the United States and other countries have made it more difficult to obtain these licenses, he said.

Apple had 272,000 games in its China App Store last year, according to Sensor Tower, a company that tracks app operations globally. For 2020, it has found at least 94,000 removals from the China store, which exceeds the 25,000 gaming apps that were taken down last year.

While the entire software cleanup is still unclear, revenue growth from games in Apple’s China store seems to have slowed even as the segment has increased its pace globally. Sensor Tower estimates gaming revenue in China this year to November by 14% to $ 13 billion. This is compared with an increase of 21% in China during the same period in 2019 and a 26% profit globally this year.

Apple’s app store has caught fire in different parts of the world. It faces accusations from competitors of anti-competitive behavior – which Apple has denied – and control of legislation in the United States and Europe.

“This veil of secrecy as to why they are removing this information is what makes it even more worrying.”

– Katie Paul, from Campaign for Accountability

Critics have questioned Apple’s decision to meet some of China’s demands, saying they run counter to CEO Tim Cook’s stated desire to stand for freedom of speech, integrity and human rights.

New research from Campaign for Accountability, a law firm in Washington, DC, identified more than 3,000 apps that are not in the China App Store but are in other countries. The group, whose major supporters include David Magerman, the George Soros Open Society Foundations and Craig Newmark Philanthropies, has fought against major technology companies such as Google and Apple.

Nearly a third of the apps missing from Apple’s China Store were related to what the advocacy group considered topics of “hot button human rights”, such as Tibetan Buddhism, protests in Hong Kong and homosexuals or transgender people or themes, while 5% were about pornography or gambling. Another big piece was games.

“If it will bend to political pressure, the company should explain why and what they would lose if they did not,” said Katie Paul, director of the Tech Transparency Project. “This veil of secrecy as to why they are removing this information is what makes it even more worrying.”

She acknowledged that the differences in Apple’s offerings in China may be due in part to developers who, in fact, censor themselves and know their chances of being approved in the country.

Apple faces punishment from two sides: from Chinese state media for not doing enough to filter out banned content and complaints from outside China, that it is bowing to state censorship. The company has said it follows local laws.

In a statement on Monday, Apple reiterated that its app stores are subject to local regulations and sometimes field requests to remove certain apps.

“Apple carefully studies these requests when we receive them, and we dispute and do not agree with them often,” said a company spokesman. “Although the final decisions sometimes conflict with our wishes, we believe that our customers are best served when we stay in the country and give them access to products that promote self-expression with world-class privacy protection.”

Apple, like Google, removed apps associated with Hong Kong’s protests against the government, including a crowded map service that tracked police activity. The People’s Daily, run by the Chinese Communist Party, had called the app “toxic software”.

Apple said the map violates guidelines and local laws, and Mr Cook defended the company’s actions in a memo to staff, noting the difficulties. “National and international debates will survive us all, and while important, they do not govern the facts,” he wrote. “We believe this decision best protects our users.”

In its latest release reports, Apple said it received 103 requests from Chinese authorities last year for the removal of 399 apps due to legal violations, the majority of which were related to pornography and illegal content. Apple said it complied with most of these requests and pulled down 381 apps. In addition, Apple said in response to government inquiries that it took down 129 apps during that period in China for so-called platform violations, such as illegal gaming.

Write to Tim Higgins at [email protected]

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