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Chinese Regulators Stop Didi’s App Downloads Over Alleged Data Breach

Chinese Regulators Stop Didi’s App Downloads Over Alleged Data Breach
Smartphone app stores in China have been ordered not to offer Didi Global Inc's apps following findings by China's cyberspace regulator that users' personal data had been illegally gathered by the ride-hailing giant, the regulator has said.
Didi had been told to bring in changes in the manner in which it gathers data so that it can comply with Chinese data protection rules, said the Cyberspace Administration of China (CAC). It was just a few days ago that Didi had started trading on the New York Stock Exchange and had raised $4.4 billion through its initial public offering,
In a statement on its social media feed, the nature of Didi's violation was not specified by the CAC.
In response, Didi said that registration of new users had been stopped by it and added that it would also remove its apps from app stores. Changes would be made by it to comply with rules and protect users' rights, the company said.
Strict action is being taken by Chinese regulators on its home-grown technology giants over issues related to antitrust and data security.
The IPO launched by Didi in New York last week put the value of the company at $67.5= billion which was much lower than the $100 billion that it had targeted to achieve but which was not accepted by potential investors.
The move by the CAC appeared to be "aggressive", said Redex Research director Kirk Boodry, who publishes on Smartkarma.
"(It) indicates the process could take a while, but they have a large installed base so near-term impact (is) likely muted for now," he said.
People who had already downloaded Didi's app in China could still use the app and get access to more than 20 million average daily rides that the company operates in China.
Initiation of an investigation into Didi to protect "national security and the public interest" was announced last Friday by CAC which hit the shares of the newly listed company.
Vast amounts of real-time mobility data is collected every day by the company through its services it offers in China and in more than 15 other markets. Some of the data collected is used for autonomous driving technologies and traffic analysis by the company.
"We follow strict procedures in collecting, transmitting, storing and using user data pursuant to our data security and privacy policies" Didi had said in its IPO prospectus while flagging Chinese regulations.
A update on its user information and data privacy policy was made by Didi on June 29, according to a notice on Didi's China app, the day prior to the company launching the IPO. That move was described by the company as a "regular update" – implemented after it had added two new services on the app under its chauffeur business.
Founded by Will Cheng in 2012, the company had previously been subject to regulatory probes in China over safety and its operating licence.

Christopher J. Mitchell

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