The Chinese government’s announcement in May of new regulations for Internet map services will make it harder for foreign companies to obtain licenses that allow them to operate a mapping business in the country, a development that is expected to have a major impact on Google Inc.
China’s State Bureau of Surveying and Mapping has expanded the definition of Internet maps to include maps designed for mobile Internet devices such as mobile phones and PDAs. Under this new regulation, popular smart phone applications such as Google Maps Mobile and Ovi Maps are included.
According to a new rule from the Chinese agency, all Internet Map Service Providers (IMSP) must acquire licenses by the end of 2010. Companies operating Internet map services without a license will be prosecuted.
- The SBSM regulates Internet map services under four categories:
- Map search, navigation and location-based services
- Geo-coded information labeling, or marking a spot on the map with information such as name, address, pictures and reviews
- Map downloading and map copying services
- Map sending and linking services
Map sending allows users to send search inquiries, planned routes, and transit information to specified third parties, such as Google Maps’ Send2Email and Send2Car features. Map linking enables users to embed the provider’s map and functionality on their own websites by utilizing the map’s Application Programming Interface (API). For example, Google Maps’ API and Baidu Maps’ API support map linking for other websites.
SBSM states that about 42,000 websites are involved in Internet map services in China. Among these, companies providing the full suite of services above will be required to get a Class A license from the state government.
The new licensing standards also specify that:
- No wholly foreign-owned enterprises with more than 51 percent Chinese ownership will be allowed to operate Internet map services and joint ventures
- All online maps must be stored in servers located inside China
- IMSPs should possess capabilities and resources to monitor as well as censor the map-labeling activities of users
- Providers must have no record of misconduct for leaking confidential information, such as losing data files or disclosing sensitive data, during the past three years
Why is Google not Licensed?
So far, 26 companies have been approved for licenses; except for Nokia Corp.’s Chinese joint venture, all are wholly owned Chinese companies. According to SBSM, an application has yet to be submitted by Google, for which a license will be required in light of the company’s full suite of mapping services, as defined by the state bureau, for both Google’s online offering and its mobile space services.
Indeed, a Chinese mapping industry insider has told iSuppli that Google has not submitted its application, given that the company first had to wait for its Internet Content Provider (ICP) license to be renewed by the Chinese government—a prerequisite for the IMSP license. Yet interestingly enough, Google’s ICP license recently has been renewed.
It appears, then, that Google is unlikely to receive the IMSP license any time soon—at least not until it makes certain changes to its current mapping practice in China. As SBSM specifications stipulate, Google first will have to form joint ventures or partnerships with local firms, then subsequently must place both its Google Maps and Google Earth servers inside China.
Even if Google manages to accomplish these two conditions, questions remain regarding whether it would really compromise itself to meet the government’s third specification: censoring the maps. According to the new rules, licensed Internet map service providers must automatically censor all map content generated by users before publicizing them on Internet maps. The government then reviews the censorship performance of providers every six months, and decides whether to renew the licenses.
Such a process seems to conflict with Google’s informal corporate motto of “Don’t be evil”—in this case, to censor others, and by the same token, to allow itself to be censored by the Chinese government. After all, censorship was the culprit that started Google’s trouble with the Chinese government and imperiled its ICP license in the first place.
In effect, China’s new standards for Internet Map Services Providers may deter foreign enterprises like Google, which do not desire to follow the new rules, as well as smaller-scale providers of Internet map services that lack the resources to maintain compliance. Other big map providers like AutoNavi, NavInfo and Baidu—already have been compliant with the government’s mandated standards long before they were even publicly issued— conceivably could have a head start to stay on top of the game, and then go on to gain whatever business from which Google is excluded.