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OpinionChina Opinion
Zhou Xin
Zhou Xin

Opinion | Apple, Tesla win lawsuits in China, as Beijing projects ‘rule-of-law’ message to foreign businesses

  • A growing nationalist sentiment among the general public is adding uncertainty for foreign brands operating in China
  • The new mood marks a subtle change from three years ago when Beijing was more assertive in clipping the wings of Big Tech firms

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Image showing a woman protesting against Tesla at the 2021 Shanghai Auto Show. Photo: Handout
Zhou Xin

Apple and Tesla, two US multinational companies with a huge presence in China, have won two small but significant consumer-led lawsuits in the country, in a sign that Beijing is trying to project a “rule-of-law” message to foreign investors.

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In the first case, the Shanghai Intellectual Property Court rejected a Chinese consumer’s claim that Apple has been abusing its market dominance in its App Store to charge iOS developers a 30 per cent commission. The court ruled that Apple does have a dominant market position, but there was no evidence that it “abused” its position. The ruling essentially said Apple’s charge to app developers, dubbed “Apple tax” by some, is fair.

In the second case, the Shanghai Qingpu District People’s Court has ordered a Tesla Model 3 owner, who protested against an alleged “brake failure” in his car by climbing on top of a Tesla vehicle at the 2021 Shanghai auto show, to pay the carmaker 172,275 yuan (US$23,500) in compensation. The protester, surnamed Zhang, was also ordered by the court to post an apology on her Weibo account for at least 30 days, and pay for an apology notice in the Legal Daily, the official newspaper for China’s court system.

People walk past an Apple store in Shanghai, September 13, 2023. Photo: Reuters
People walk past an Apple store in Shanghai, September 13, 2023. Photo: Reuters

The two cases are not related and the initial rulings have been appealed, but the message is clear: the legitimate interests of foreign businesses are protected by Chinese laws.

In the past two years, China’s image as an ideal destination for foreign investment has been tarnished by the country’s draconian Covid-19 lockdowns, and its tightened security screenings of consulting and legal services. Meanwhile, a growing nationalist sentiment among the general public is adding uncertainty for foreign brands operating in China.

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