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In China, the Didi app has been blocked due to allegations of unlawful data collecting from consumers.
Carlos Jasso/Reuters
Reuters, 4 July 2021
After discovering that Didi had illegally acquired customers’ personal data, China’s internet government ordered smartphone app retailers to stop distributing the ride-hailing business Didi Global Inc’s app.
On its social media feed, the Chinese Cyberspace Administration (CAC) announced that it has forced Didi to make modifications in order to comply with Chinese data protection regulations. It didn’t say what Didi’s transgression was.
Didi responded by announcing that it would cease accepting new users and remove its app from app stores. It stated that it would make modifications in order to comply with the rules and defend the rights of users.
Following a $4.4 billion initial public offering, Didi debuted on the New York Stock Exchange on Wednesday (IPO).
In its initial public offering, Didi was valued at $67.5 billion, far less than the $100 billion it had planned for, which potential investors had refused.
CAC’s move sounded severe, but Didi has already been barred from adding new customers during an examination of its cybersecurity, according to Redex Research head Kirk Boodry, who publishes on Smartkarma.
“It signals that the procedure may take some time, but they have a huge installed base, so the immediate impact is likely to be minimal for the time being.”
In China, Didi’s app was still functional for those who had already downloaded it. On average, it provides about 20 million rides per day in China.
CAC opened a probe into Didi on Friday to defend “national security and the public interest,” causing its stock to drop 5.3 percent to $15.53.
The stock was sold at $14 in the first public offering, which was at the top of the highlighted range.
In recent years, Chinese regulators have tightened data collecting laws for large digital companies.
Didi, which operates in China and over 15 other regions, collects massive amounts of real-time mobility data on a daily basis. It makes use of some of the information for autonomous driving and traffic analysis.
Will Cheng founded the company in 2012, and it has already faced regulatory scrutiny in China over its safety and operating license.
“We follow stringent protocols in collecting, sending, keeping, and using user data pursuant to our data security and privacy policies,” Didi wrote in its IPO prospectus, citing relevant Chinese rules.
Reuters
Didi
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Related Articles
Regulations & Policy
China is looking at Didi’s cyber security just days after its massive IPO.
During the inquiry, Didi is not allowed to register new users, according to the regulator’s website.
Markets & Initial Public Offerings
Didi Global, a Chinese company, will be included in S&P Dow Jones’ global equity indexes.
Didi will be included in FTSE Russell’s global equity indices, the company announced earlier this week.
Markets & Initial Public Offerings
After the first day of trading in the United States, China’s Didi was valued at $68 billion.
Didi’s stock began at $16.65, up from its initial public offering price of $14.
Analysis
After a $4.4 billion IPO, the founders of Didi, a Chinese ride-hailing company, are looking to expand globally.
Will Wei Cheng and Jean Qing Liu will now be put to the test to see if they can stop the bleeding.
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