Beijing Launches Spy Probe Against Coca-Cola

Channel News Asia reports on Beijing’s allegations that the multinational Coca-Cola Company has been performing illegal mapping in China:

US soft drinks giant is “cooperating fully” with Chinese authorities on allegations that it illegally mapped part of a southwestern province as part of its distribution operations, it said Wednesday.

Coca-Cola was found to have “illegally collected classified information with handheld equipment”, a news portal run by party officials in Yunnan province, said last month, citing a provincial mapping bureau.

The report did not provide further details on the case.

Coca-Cola said that its local bottling plants in China have used electronic mapping and other techniques as part of their logistics activities, but added that all the systems they used were freely available.

The South China Morning Post reports an ongoing “anti-espionage investigation” into Coca-Cola, and notes the involvement of the Ministry of State Security, hinting that Beijing is earnestly approaching what they see as an important case:

The case is being handled jointly by the National Administration of Surveying, Mapping and Geoinformation and the Ministry of State Security. The involvement of the top intelligence authority underscores the seriousness of the case.

“We understand that is a serious charge against a world famous company,” said an official from the administration. “We are still in the process of gathering information.

“What we can say for now is that many subsidiaries of Coca-Cola are involved and this happens in many provinces. Due to the sheer scale of the case, the complexity of the technology involved and the implication to our , we are working with the Ministry of State Security on this.”

National security concerns led China to crackdown on companies offering online mapping services back in 2010. As GPS technology has become a ubiquitous fixture in modern-day society, concerns over national security have prompted China to tighten regulations on standard GPS equipment, and to develop the Beidou navigation system – their own alternative to the U.S.-maintained network of GPS satellites – which opened for commercial use late last year. The Wall Street Journal reports on the ambiguities that companies and researchers face while working in the midst of Beijing’s GPS and mapping apprehensions:

Beijing has long been guarded about mapping, for national-security reasons and because of sensitivity over the definition of the country’s borders and the names of disputed territories. It has stepped up regulations as standard international GPS technology has proliferated in mobile phones and other hand-held devices.

Companies providing online map and location services in China are required to apply for government approval, under rules from China’s State Bureau of Surveying and Mapping. Approval typically is reserved for domestic companies.

The rules for conducting research and collecting data for business in China often are unclear and have caused problems for foreign companies. A Chinese court in 2010 sentenced American geologist Xue Feng to eight years in prison for trying to buy data about China’s oil industry, including the coordinates of wells. The data were believed to have been commercially available, Mr. Xue’s defense team said. But the court convicted him on charges of attempting to obtain and traffic in state secrets, raising questions on the definition of secret information.

News of Beijing’s espionage probe into the U.S.-based Coca-Cola Company comes days after the Obama administration called on China to make “serious steps” to prevent cybertheft in the wake of a highly publicized string of hacking campaigns against U.S. news organizations.

March 14, 2013, 4:30 PM
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