Bad times for Giant Tech Firms in China

This week, one of the most popular subjects on Chinese social media is Didi and the company’s dire financial state. On July 21, the Cyberspace Administration of China (CAC) fined Didi Global 8.026 billion yuan [US$1.19 billion] for allegedly violating at least three main laws, notably China’s Network Security Law, Data Security Law, and Personal Information Protection Law. Online discussions are ongoing.

Personal fines of one million yuan (US$148,000) for Didi’s CEO Cheng Wei and President Liu Qing were also levied against them. On July 2nd, 2021, two days after Didi’s initial public offering in New York, Beijing started a cybersecurity inquiry into the company. To preserve national security and the public interest, the probe was begun at a time when Didi allegedly defied the CAC by going through with its New York stock market listing despite being advised to do so by the CAC.

Later, the CAC ruled that Didi’s services be removed from all domestic app stores. The CAC has concluded that Didi committed 16 law violations, including illegally obtaining information from users’ smartphones (such as collecting information from users’ clipboards and photo albums) and “excessively” collecting personal data, such as facial recognition and information relating to age, occupation, home/work addresses, and family relations (also see Zichen Wang’s write-up on Didi).

The CAC has concluded that Didi committed 16 law violations, including illegally obtaining information from users’ smartphones (such as collecting information from users’ clipboards and photo albums) and “excessively” collecting personal data, such as facial recognition and information relating to age, occupation, home/work addresses, and family relations (also see Zichen Wang’s write-up on Didi). It is estimated that Didi Chuxing has more than 550 million users and 31 million drivers in China.

Other app-based transportation services provided by Didi include private automobile hailing and social ride-sharing, in addition to taxis. This isn’t the company’s first brush with controversy. As a result of the killings of two young women by Didi drivers in 2018, there was widespread indignation and worry about the safety of clients using the Didi service to hail a taxi.

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