The Chinese government has ordered the removal of the country’s leading ride-hailing platform, Didi, from app stores because of “serious” problems with the collection and use of customer data. Beijing’s latest for the company, which is already listed on the New York Stock Exchange. just last week.
In a brief statement on Sunday night, China’s internet regulator, the Cyberspace Administration of China, did not explain what problems it had discovered, only saying that its decision was based on information was reported to them, then checked and verified. The regulator has asked Didi to correct the problems and “seriously protect and extend the security of personal user data.”
On Friday, the same regulator made another surprise announcement of the evening, saying that new user registrations on Didi would be suspended while authorities conducted a “security review”. network security”. The agency did not say what prompted the review.
That announcement, made just days into Didi’s life as a publicly traded business on Wall Street, sent the company’s stock price down 5% on Friday.
It’s unclear if Didi’s removal from the app stores on Sunday was related to a cybersecurity review, although with new user registrations having been halted, the actual effect of the removal apps from the stores may be restricted.
In a statement posted Sunday night on Chinese social media, Didi offered a “sincere thanks” to the government for its guidance and said it would resolve the matter promptly. “conscientious”. The statement also said users who already have the Didi app on their phones will not be affected.
Two quick moves by the internet regulator, especially coming soon after the company raised billions of dollars in its initial Wall Street debut, represent an intensifying effort by Beijing. to suppress Didi.
Didi has become China’s top ride-hailing app since it bought Uber’s operations in the country in 2016, following a period of stiff rivalry between the two companies. Didi said its service had 377 million active users in China in the year ended March. It also operates in 16 other countries, including Australia, Brazil, Japan, Mexico and South Africa.
Beijing has ramped up regulatory heat on Chinese internet companies in recent months, accusing them of unfairly competing with rivals and using consumer data to reap greater profits from them. .
Alibaba, the e-commerce giant, was fined a record $2.8 billion in April for antitrust violations. Soon after, China’s antitrust authority began investigating food delivery giant Meituan for the same reason. Other major internet companies, including Didi and TikTok’s parent company, ByteDance, were subpoenaed before regulators and ordered to “put the national interest first”.
China’s internet regulator has also named hundreds of apps that it says collect personal data excessively or use it in inappropriate ways. Apps have included those created by some of China’s most famous internet companies, including ByteDance, Tencent and Baidu. But in those cases, the regulator only requires app makers to fix the problem within a certain period of time. It did not order the mobile store to remove the app.