China orders Didi out of app stores amid growing crackdown


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The Chinese government has ordered the country’s leading ridesharing platform, Didi, to pull app stores over “serious” issues related to the collection and use of customer data, Beijing’s latest blow to the company, which went public on the New York Stock Exchange just last week.

In his brief announcement at the end of the evening China’s internet regulator, the Cyberspace Administration of China, on Sunday did not explain the problems it found, only that its decision was based on information reported to it, then tested and verified. The regulator ordered Didi to correct the problems and “seriously protect the security of personal information of all users.”

On Friday, the same regulator issued another surprise announcement in the evening, claiming that new user registrations on Didi would be suspended while authorities carried out a “cybersecurity review”. The agency did not specify what prompted the review.

The announcement, made just two days after Didi started life as a listed company on Wall Street, caused the company’s stock price to drop 5% on Friday.

It was not clear whether Didi’s removal from app stores on Sunday was related to the cybersecurity review, although with the cessation of new user registrations, the practical effect of the removal of the application of stores will likely be limited.

In a statement posted on Chinese social media on Sunday evening, Didi thanked the government for its “sincere thanks” and said he would solve the problems “conscientiously”. The release also says that users who already have the Didi app on their phone will not be affected.

The two successive steps taken by the internet regulator, especially so soon after the company raised billions of dollars in its Wall Street debut, suggest an intensification of Beijing’s efforts to bring Didi under control.

Didi has been the leading ridesharing app in China since 2016, when it bought out Uber’s operations in the country after a period of intense competition between the two companies. Didi said his service had 377 million active users in China in the year that ended in March. It also operates in 16 other countries, including Australia, Brazil, Japan, Mexico and South Africa.

Beijing has stepped up regulations on Chinese internet companies in recent months, accusing them of competing unfairly with their competitors and using consumer data to make more profit.

Alibaba, the e-commerce giant, was fined a record $ 2.8 billion in April for violations of anti-monopoly laws. Soon after, the Chinese antitrust authority began investigating food delivery giant Meituan on similar grounds. Other big internet companies, including Didi and TikTok’s parent company, ByteDance, have been called before regulators and ordered to “put the interests of the nation first.”

China’s Internet regulator has also appointed hundreds of applications that it says collects excess personal data or uses it inappropriately. Among them are apps created by some of China’s most prominent internet companies, including ByteDance, Tencent, and Baidu. But in these cases, the regulator only required that the creators of the applications solve the problems within a certain period of time. He did not order mobile phone stores to remove the apps.

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About Madeline Powers

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