China’s cyberspace regulator has announced that it has ordered smartphone app stores to stop offering Didi Global Inc’s app after discovering that the rideshare giant had illegally collected personal data from users.
On Sunday, the China Cyberspace Administration (CAC) said it had told Didi to make changes to comply with Chinese data protection regulations, four days after Didi began trading on the New York Stock Exchange. , after having raised $ 4.4 billion in an initial public offering.
The CAC did not specify the nature of Didi’s rape in a statement on its social media.
Didi responded by saying that it had stopped registering new users and would remove its app from the app stores. He said he would make changes to comply with the rules and protect users’ rights.
“The company expects that the removal of the application may have an adverse impact on its revenue in China,” the company said in a statement.
China has been cracking down on its homegrown tech giants over antitrust and data security concerns. Didi is the latest Chinese tech unicorn to be targeted by authorities after Ant, Alibaba’s fintech arm, was forced to halt a record IPO last November.
Didi made its commercial debut Wednesday in an IPO that valued the company at $ 67.5 billion, well below the $ 100 billion it expected, which potential investors had resisted.
Redex Research director Kirk Boodry, who publishes in Smartkarma, said the CAC measure seemed “aggressive.” “(This) indicates that the process could take a while, but they have a large installed base, so the short-term impact will likely (be) muted for now,” he said.
Didi’s app still worked in China for people who had already downloaded it. It offers more than 20 million trips in China every day, on average.
CAC announced on Friday an investigation into Didi to protect “national security and the public interest”, which caused a 5.3% drop in its share price to $ 15.53. The stock sold for $ 14 a share on the IPO, the highest level of the indicated range.
Didi, serving China and more than 15 other markets, collects massive amounts of mobility data in real time every day. It uses some of the data for autonomous driving technologies and traffic analysis.
Didi had pointed out the Chinese regulations in its IPO prospectus and said: “We follow strict procedures in the collection, transmission, storage and use of user data in accordance with our data privacy and security policies.”
Founded by Will Cheng in 2012, the company had previously been subject to regulatory probes in China on security and its operating license.