China orders Didi removed from app stores over data privacy concerns


China has forced app stores operating in the country to remove ride-hailing giant Didi Chuxing’s app on the grounds of illegal collection of personal data.

The move does not affect people who have already downloaded the app, but could impact Didi’s $4.4 billion initial public offering in New York.

Didi is the market leader in China after buying Uber’s China operations in 2017 and investing $1 billion in Uber globally, giving it a “minority stake” in the company. It has also expanded into Europe and Africa after investing an undisclosed amount in Taxify, an Estonia-based ridesharing operator.

In China, it provides ride-sharing services, on-demand delivery services and automotive services, including sales, fleet operation, electric vehicle charging and vehicle co-development with automakers.

“We sincerely thank the responsible departments for guiding Didi to inspect the risks. We are committed to conscientiously rectifying issues,” Didi said.

Why is this happening to Didi?

  • Didi was among 34 technology companies under investigation by Chinese antitrust watchdogs in April, which conducted on-site inspections of Didi.

  • China’s legislature passed a data security law in June 2020 establishing rules for how customer data is used, collected, developed and protected, and providing a legal basis for the country to request data from technology companies. .

  • China is now one of the most regulated data control countries after passing a cybersecurity law in 2017. It has since introduced laws to regulate data collection practices and the use of personal data. , and limit anti-competitive practices.

  • In March, Alibaba was ordered to relinquish its media holdings over fears the e-commerce giant was becoming too influential.

  • Media properties that Alibaba owns and has stakes in include The South China Morning Post newspaper, social media platform Weibo, video streaming platform Youku Tudou, film production house Alibaba Pictures and Focus Media. , China’s largest offline ad network.

  • China was also angered by comments by Alibaba founder Jack Ma about Chinese President Xi Jinping’s efforts to regulate Ant Group, the financial arm of Alibaba, which offers consumer-focused financial services. The company’s financial platform, Alipay, has a wealth of data on users’ spending, borrowing and lending habits and history.

  • A month later, China fined Alibaba $2.8 billion for penalizing merchants who sell their products on Alibaba’s platform as well as other e-commerce platforms in the country.

  • Alibaba will now have to revamp its platform operations and submit a “compliance self-examination report” by 2024.

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