After cracking down on Didi app, China launches probe into other US-listed tech giants
- In Reports
- 04:42 PM, Jul 06, 2021
- Myind Staff
After ordering the removal of ride-sharing group Didi Chuxing from Chinese app stores, the Cyberspace Administration of China (CAC) on Monday announced it was investigating three more tech companies over security threat.
The crackdown began on Friday when the CAC announced it was investigating Didi, telling the company to stop registering new users and drivers for its app. On Sunday, the CAC ordered Didi be removed from Chinese app stores.
The company said that it would “resolutely implement” authorities’ demands. Just two days ago, Didi Chuxing, the company listed on the New York Stock Exchange, raised 4.4 billion USD in the biggest listing by a Chinese company in the US since Alibaba in 2014.
Three other companies targeted on Monday are Boss Zhipin, an online recruitment company, and Chinese truck-hailing apps Yunmanman and Huochebang, which merged in 2017 to form Full Truck Alliance. Like Didi, Full Truck Alliance and Boss Zhipin listed in New York in June, raised $1.6bn and $912m, respectively.
All of them are not allowed to register new users while they are under investigation. The CAC’s announcement cited suspected violations of China’s national security and cyber security laws.
The companies under investigation recently went public in the US stock market, even though geopolitical tensions between the two countries remain high and Chinese authorities have been cracking down on technology companies.
The CAC said the probes were being conducted under new cyberspace procedures enacted on June 1 that strengthened oversight of companies operating critical information technology infrastructure that could touch on national security.
To justify China’s action the state-run tabloid said that for companies like Didi, whose largest and second-largest shareholders are foreign companies which also include US ride-hailing group Uber, China should more strictly supervise their information security to protect both personal data security and national security. It said that the Chinese government felt it necessary to step in to protect personal information.
Didi Chuxing app is found to have severely violated the laws by illegally collecting and using personal information,” the CAC said on Sunday. It called on Didi to fix the issue with its app to comply with the country’s laws and to ensure its customers’ safety.
Didi, which has 377 million active users in China alone, said in a statement that it is complying with China’s demands, pulling the app from stores as it works to make changes to its app to satisfy regulators. The company said customers and drivers who have already downloaded the app won’t be affected.
“We sincerely thank the … department for its instruction in troubleshooting Didi’s risks,” Didi said. It said, “We will rectify and improve risk avoidance and … provide safe and convenient services to our users.”
The ban on Didi comes less than a week after it went public on the New York Stock Exchange in the biggest US share offering by a Chinese company since Alibaba debuted in 2014.
Just two days later, on Friday, China launched a probe into Didi and suspended the registration of new users on the app. Didi’s stock price tumbled Friday.
Image Source: CNN
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