Friday, July 30, 2021

Ride-hailing giant Didi taken off China’s app stores by cyber regulator

Beijing regulators have been getting tough with the country's technology giants, including Alibaba and Tencent.

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The ride-hailing app Didi Chuxing has been ordered off China’s app stores, just days after the Chinese tech giant launched its shares in New York.

China’s cyberspace regulator ordered its removal after accusing it of violating laws on collecting users’ personal data.

The firm said the app would continue to operate, but said it could not now register new users.

Beijing has recently begun to tighten controls on the country’s large tech firms.

Didi, a platform similar to Uber and Grab, provides more than 20 million rides in China every day. Founded in 2012, it is particularly popular in China’s crowded cities.

The company’s founder Cheng Wei has said he had the idea to launch a ride-hailing platform in 2012 after he struggled to book a taxi on a freezing night in Beijing.

It now operates beyond China in 15 other markets across Asia, Australia, and Latin America.

Last week it raised US$4.4 billion through an initial public offering in New York, making it the largest share launch since Chinese online retailer Alibaba’s in 2014.

Just a day after shares began trading in New York, the Cyberspace Administration of China (CAC) announced it was investigating the firm to protect “national security and the public interest”, prompting its shares to drop 5.3%.

Didi gathers vast amounts of real-time mobility data every day. It uses some of the data for autonomous driving technologies and traffic analysis.

The CAC said: “After checks and verification, the Didi Chuxing app was found to be in serious violation of regulations in its collection and use of personal information.”

This investigation follows regulatory crackdowns on other tech firms, from Alibaba to food delivery service Meituan.

In June this year, it was reported that Didi was being probed by China’s market watchdog.

The State Administration for Market Regulation was investigating whether it had unfairly squeezing out smaller rivals, according to Reuters.

Beijing regulators have been getting tough with the country’s technology giants, including Alibaba and Tencent.

Japan’s SoftBank is Didi’s largest single investor with a stake of more than 20%. It is also backed by Chinese technology giants Alibaba and Tencent.

Uber owns 12% of the firm as a result of Didi taking over Uber China in 2016.

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