The news: Apple won’t offer its "Private Relay" encrypted web browsing in China, Saudi Arabia, and a handful of other countries due to regulatory restrictions, further complicating the company’s commitment to personal privacy, per Reuters.

• For context, the Private Relay is essentially Apple’s version of a VPN that prevents anyone, even a user’s ISP, from tracking their browsing history.
• VPNs are banned in China but are still widely employed by Chinese internet users to circumvent the government’s Great Firewall.

How we got here: Last month, a New York Times investigation claimed Apple gave in to government demands to hold Chinese consumer data on Chinese servers, and has collaborated in censoring certain apps. Apple responded that it has "never compromised the security of our users or their data in China or anywhere else we operate."

The big picture: Apple finds itself faced with an intractable privacy paradox in China, one of its fastest-growing markets.

In recent years, Apple has tried to entrench itself as a bastion of privacy, taking high-profile civil liberty stands against the US government and waging a marketing war against Facebook and others over the ethics of data privacy. But that hardline stance appears much more flexible in China, where Apple’s Q2 2021 earnings were up 87.5% YoY, making the region Apple’s third-largest by revenue. Though many rival US tech companies are either banned or have chosen not to operate in the country, Apple has dug in and committed itself to expanding its presence despite government principles inherently opposed to its philosophy on privacy.

The bottom line: Unless Apple decides to take a San Bernardino-style stand against the Chinese government’s demands, or opts to ditch the market entirely, the company will be forced to operate with two contradictory approaches to privacy.