China targets Apple's iCloud with hacking attack: Report

Chinese authorities have tried to gain access to the customer data held on Apple's iCloud storage and backup system, according to research by an organization that monitors web usage in China.

Calling it a clear "malicious attack," GreatFire.org alleged that data such as iMessages, photos and contacts may have been compromised. It added that it follows similar attacks against technology companies such as Github, Google, Yahoo and Microsoft.

"The Chinese authorities are now staging a man-in-the-middle (MITM) attack on Apple's iCloud," the censorship watchdog said in a blogpost on its website Monday.

"This episode should provide a clear warning signal to foreign companies that work with the Chinese authorities on their censorship agenda."

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Customers looking at iPhones in an Apple store in Shanghai.
Peter Parks | AFP | Getty Images
Customers looking at iPhones in an Apple store in Shanghai.

A MITM attack is described as when an entity intercepts online communications between two parties without them learning of the incident and is similar to an internet form of eavesdropping. The attack involves routing the user through servers or systems that will attempt to capture their log-on information, according to Ernest Hilbert, a former FBI agent and head of cyber investigations for EMEA at risk consultancy Kroll.

"The information can then be used at a later time to log in and see what the owner of the account was viewing," he told CNBC via email.

GreatFire.org - a not-for-profit body whose staff prefer to remain anonymous - said that customer data in the whole of China could potentially have been compromised and said that users would have been more at risk if they were not using "trusted" browsers such as Firefox and Chrome. It didn't highlight how many accounts had actually been subjected to the attack.

Apple declined to comment immediately on the report when contacted by CNBC. Chinese authorities have already rebutted the allegations. Hua Chunying, a spokeswoman for China's Foreign Ministry, said that the country was "resolutely opposed" to hacking at a news briefing on Monday, according to Reuters news agency.

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The report coincides with the release of the new iPhone 6 and iPhone 6 Plus in China on Friday. The country is seen as a key growth market for the Cupertino-based tech giant whose revenue in the region actually contracted by 3 percent in its fourth quarter, compared to the period before. The Apple devices are available through its own website along with deals via China Mobile, China Telecom and China Unicom.

Apple is already investigating a high-profile leak into several of its iCloud accounts in early September. Photos and videos of Hollywood stars were accessed and posted all over the web but Apple has blamed the incident on a targeted attack rather than a breach of any of its systems. In response it has announced it is to ramp up its security procedures and has included a two-step authentication security system when backing up files on its iCloud service.

GreatFire.org suggested that this latest incident may somehow be related to the ongoing Hong Kong protests which has involved participants sharing videos and images using social media websites. It also drew attention to the fact that the latest iPhone products provide users with increased encryption technologies which it claims could have conflicted with its relationship with the Chinese authorities.

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Lawrence Lundy, an ICT strategy consultant at Frost & Sullivan, told CNBC in an interview that he was unsurprised by the reports and said that he believed that all technology firms had to work with the Chinese authorities to gain a foothold in an increasingly important growth market.

"It is unlikely that Apple knew about this explicitly," he said. "Apple must find a balance between continued growth in China and protecting their users' data. Clearly Apple and the Chinese governments have misaligned incentives, which may be behind the delays in launching the new iPhone in China."

—Additional reporting by CNBC's Arjun Kharpal.