US Tech Companies Will Have to Share Their Source Code with Chinese Authorities

Information Security is a topic that has taken the spotlight in the technology sector. Companies and governments are becoming increasingly wary of their surroundings, but China has stepped up the game; the Country will request US tech companies to show them their source code to “make sure” there aren’t any backdoors.

A new legislation is causing headaches for US technology companies such as Microsoft, IBM, and Intel. The law is a new episode in a series of regulatory scuffles between American companies and Chinese authorities.

The Asian country will require foreign software and hardware companies to reveal their proprietary source code,  instructions that any computer program has to follow to perform a task. The legislation will also affect network appliance providers of routers, switches, and wireless access points. The goal is to make sure that those companies aren’t using vulnerable applications to spy on the Chinese government or its citizens.

US companies are fiercely fighting the new legislation.  Source code is the main intellectual property of a technology firm, so it’s only natural that they would want to protect it. Microsoft officially replied to the Chinese government, saying that “Sharing source code in itself can’t prove the capability to be secure and controllable.”

But the battle may be already over for the US firms.  The law was passed on November 7th, and its adoption is a certainty for the Technical Committee 260, a Chinese national cybersecurity standardization office. The committee is preparing new protocols and standards for operating systems, microcontrollers, chips, software, and other products.

The American companies have been speaking with the officials to voice their complaints.  The Chinese government argues that the new legislation was necessary to protect themselves from espionage. The authorities often quote Edward Snowden, the former NSA contractor and whistle blower, who said that the US government has built back doors and other weaknesses in software and hardware sold by national companies.

As reported by the Wall Street Journal, the companies decided to partner with each other, alongside Chinese firms and security experts, to fight the new law. Microsoft, for example, directed Chinese officials to its ‘Transparency Center‘ in Beijing, a building designed to “increase trust in Microsoft offerings”. In September, the company said:

For government customers, our work in the area of transparency is particularly critical as they want to know with a high level of assurance that our products are engineered to withstand the security threats they see every day.

The question remains on whether this new incident will mark a turning point for foreign companies who so far have decided to stay operating on Chinese soil.  Experts familiar with the matter, however, believe that American companies will not leave, so long as they keep making profits.