Microsoft Modifies Windows For Beijing -- WSJ
March 22 2017 - 3:02AM
Dow Jones News
BEIJING -- Microsoft Corp. has finished development of a Windows
10 version customized for Chinese government use, which could boost
its China prospects after sales were hit by Beijing's cybersecurity
crackdown.
Microsoft declined to say how the software was modified, but in
general China's government is concerned about technology products
that could contain hidden "back doors" to enable foreign
surveillance.
The Chinese government version of Windows 10 was developed with
state-owned company China Electronics Technology Group. Aimed at
reopening Microsoft's access to the Chinese state sector, it is
another example of how global companies are customizing products to
meet heightened security demands from Beijing.
Qualcomm Inc., Intel Corp. and other U.S. technology companies
have also struck similar Chinese partnerships. International
Business Machines Inc. on Sunday announced a joint venture with
Chinese conglomerate Wanda Group to provide cloud-computing
services.
U.S. companies must walk a delicate line in these ventures,
revealing enough about their technology to reassure Chinese
authorities without giving away core intellectual property to
partners who could become competitors -- or allow technical changes
that would permit the Chinese government to conduct surreptitious
surveillance of its own.
Microsoft said in an email Tuesday it was "pleased with the
progress" it made in customizing Windows 10.
In this case, the version of Windows 10 is specifically for
China's government employees, not consumers. When Microsoft in
December announced a joint venture with CETC to license and deploy
Windows, the company said it was following a similar model it
offers governments globally. Those sorts of deals often include
stripping out consumer-focused features in the operating
system.
There is little doubt the Chinese government would welcome
backdoor access to Windows, said Adam Segal, director of the
Digital and Cyberspace Policy Program at the Council on Foreign
Relations. A Chinese cybersecurity law passed in November requires
tech companies to provide "technical support" to the government.
That could lead to demands for backdoor access to programs such as
Windows, he said.
Microsoft, though, has steadfastly opposed providing that sort
of access to governments, both in the U.S. and abroad. The company
sued the Justice Department last April, opposing law-enforcement
efforts to secretly gain access to customer data. And it supported
Apple Inc.'s suit last year to prevent U.S. investigators from
forcing the company to unlock a terrorist's iPhone.
In a speech at the RSA information-security conference last
year, Microsoft president and chief legal officer Brad Smith said
"the path to hell starts at the backdoor."
The modified version of Windows software still needs to go
through Chinese government review before it can be included on
official procurement lists, a Microsoft spokesman said. Xiong
Qunli, chairman of CETC, said his company expects the government to
greenlight the software.
"We're currently beginning the sales process," Mr. Xiong
said.
CETC, which develops technology for Chinese military and
civilian use, owns 51% of the joint venture with Microsoft, C&M
Information Technology Co. Ltd.
The software has already been tested at three pilot sites,
including a China customs office, according to two people familiar
with the matter.
China had dropped Microsoft's newer products from government
procurement lists following disclosures by former U.S. National
Security Agency contractor Edward Snowden about U.S. surveillance
in 2013.
Microsoft remains under an antitrust investigation by China's
State Administration for Industry and Commerce. Microsoft has long
found the China market challenging due to widespread software
piracy and China's efforts to promote domestic technology, people
familiar with the matter said.
--Eva Dou and Yang Jie
(END) Dow Jones Newswires
March 22, 2017 02:47 ET (06:47 GMT)
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