China has blocked the ride-hailing firm Didi Global Inc’s app from smartphone app stores. According to China’s cyberspace administration, Didi has illegally collected users’ personal data.
Through its social media, the Cyberspace Administration of China (CAC) revealed to have ordered Didi to make alterations in compliance with Chinese data protection rules. The official, however, did not specify the exact point that Didi violated.
Didi is quick to respond. Following the suspension, Didi has reportedly stopped registering new users. The company also erased its app from app stores in the meantime. Didi will be making changes in its app to comply with rules and protect users’ rights.
Didi had sent out a notice on Didi’s China app that its user information and data privacy policy has been updated. The company released the notice on June 29, just a day before its New York Stock Exchange debut.
Didi, though, wouldn’t explain why the policy update was done that day.
Didi debuted in New York on Wednesday, following a $4.4 billion initial public offering (IPO).
The IPO brought the valuation for Didi to $67.5 billion, which, goes lower than the expectation at $100 billion.
Redex Research director Kirk Boodry, who publishes on Smartkarma, said CAC’s move appeared aggressive, but that Didi had anyway been banned from adding new users during a review of its cybersecurity.
“It indicates the process could take a while, but they have a large installed base so near-term impact (is) likely muted for now,” Reuters quotes.
China to investigate Didi to protect “national security and the public interest”
Currently, Didi’s app is still accessible to users who install the app on their phones. On average, the app offers more than 20 million rides in China daily.
Last Friday, CAC revealed to be investigating deeper into Didi to protect “national security and the public interest”. This led shares for Didi to decline by 5.3% to $15.53.
The stock for Didi retailed at $14 in the IPO. This figure comes at the top of the flagged range.
In the past few years, data collection rules for major tech firms in China has gone through several alterations and became a lot tighter.
Didi currently offers its services in China and over 15 other markets. Its services require a vast amount of real-time mobility data gathering every day. Didi also needs some of the data for autonomous driving technologies and traffic analysis.
Didi’s safety and its operating license have already been subjects to regulatory probes in China.
Didi, though, further had complied with relevant Chinese regulations in its IPO prospectus and said: “We follow strict procedures in collecting, transmitting, storing and using user data pursuant to our data security and privacy policies.”
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