AG Barr slams U.S. tech companies for becoming 'pawns of Chinese influence'

U.S. Attorney General William Barr discusses Pensacola Naval Air Station Shooting in Washington, DC.

Michael Brochstein | Barcroft Media | Reuters

In a sweeping address Thursday, U.S. Attorney General William Barr blasted American tech giants Google, Microsoft, Yahoo, Apple and Cisco as well as Hollywood for being "all too willing to collaborate with the Chinese Communist Party."

"The People's Republic of China is now engaged in an economic blitzkrieg—an aggressive, orchestrated, whole-of-government campaign to seize the commanding heights of the global economy and to surpass the United States as the world's preeminent superpower," Barr said during a speech at the Gerald R. Ford Presidential Museum and Library in Grand Rapids, Michigan.

"All too often, for the sake of short-term profits, American companies have succumbed to that influence—even at the expense of freedom and openness in the United States," he said, calling U.S. technology companies "pawns of Chinese influence."

In his blistering remarks, Barr slammed U.S. tech companies like Cisco for helping the Communist Party build "the Great Firewall of China," what he described as the world's "most sophisticated system for Internet surveillance and censorship."

In an emailed statement to CNBC, Cisco said it "does not supply equipment to China that is customized in any way to facilitate blocking of access or surveillance of users."

"The products we supply to China are the same we provide worldwide, and we comply fully with all export control rules applicable to China including those related to human rights," Cisco added.

Turning to Apple, Barr rebuked the company's decision to transfer a portion of its iCloud data to servers located in China, saying the move would make it easier for the Chinese government to access e-mails, text messages and other user information stored in the cloud. He accused the company of removing the news app Quartz from the app store in China after the Chinese government complained about the coverage of the Hong Kong democracy protests. He also briefly sidestepped his prepared remarks to rip Apple for being uncooperative with U.S. authorities investigating a deadly domestic terrorist case.

The Justice Department had previously asked Apple to help extract data from two iPhones that belonged to the gunman, who was linked to the al-Qaeda terror group.

"For four and a half months we tried to get in without any help from Apple," he said, adding that U.S. authorities were "ultimately able to get in through a fluke that we will not be able to reproduce in the future."

In an emailed statement to CNBC, Apple reiterated its commitment to cybersecurity and its offerings of "strong encryption across our devices and servers."

"Our products help our Chinese customers communicate, learn, express their creativity, and exercise their ingenuity. We believe in the critical importance of an open society in which information flows freely, and are convinced the best way we can continue to promote openness is to remain engaged even where we may disagree with a country's laws," the statement continued.

Google declined to comment on Barr's statements.

The company has not operated search in China since 2010 but was pressured by employees to abandon its plans to launch a new search product in China in 2018. At a hearing that year, CEO Sundar Pichai told Congress that Google had "no plans" at the time to launch such a service.

A Yahoo spokesperson declined to comment and a representative for Microsoft did not immediately respond to CNBC's request for comment.

Barr also targeted Hollywood in his comments

Barr also took aim at Hollywood companies, including Disney, saying they routinely "kowtow" to Chinese censorship demands.

"Hollywood actors, producers, and directors pride themselves on celebrating freedom and the human spirit. And every year at the Academy Awards, Americans are lectured about how this country falls short of Hollywood's ideals of social justice. But Hollywood now regularly censors its own movies to appease the Chinese Communist Party," Barr said. 

The Department of Justice chief added that Paramount Pictures told film producers working on the movie "World War Z" to remove a scene where characters speculate that a virus, which triggered a zombie apocalypse, may have originated in China.

"Many more scripts never see the light of day because writers and producers know not to test the limits. Chinese government censors don't need to say a word because Hollywood is doing their work for them. This is a massive propaganda coup for the Chinese Communist Party," Barr said.

Viacom, parent company of Paramount Pictures, did not immediately respond to CNBC's request for comment.

Sharpening his focus on Disney, Barr said the entertainment company lobbied hard to regain access to the Chinese market after the government banned all its films.

"Disney then began courting the People's Republic of China to open a $5.5 billion theme park in Shanghai. As part of that deal, Disney agreed to give Chinese government officials a role in management. Of the park's 11,000 full-time employees, 300 are active members of the Communist Party," Barr outlined, saying that he thinks "Walt Disney would be disheartened to see how the company he founded deals with the foreign dictatorships of our day."

Disney did not immediately respond to CNBC's request for comment.

Barr's comments represent another example of the crumbling relationship between Washington and Beijing. The world's two largest economies are struggling to mend trade relations, with intellectual property theft proving to be a major sticking point. The Trump administration has also previously blamed China for the health crisis caused by the coronavirus.

The Chinese Embassy in Washington did not immediately respond to a request for comment.

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