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BusinessChina

China fines Didi $1.2 billion

July 21, 2022

China's cybersecurity regulator said the ride-hailing giant illegally collected user information and carried out activities that "affected national security."

https://p.dw.com/p/4ER8Y
The Didi logo on a smartphone. (Photo by Jakub Porzycki/NurPhoto)
China's regulator said Didi conducted activities that affected national security.Image: Jakub Porzycki/NurPhoto/picture alliance

China's cybersecurity regulator fined Chinese ride-hailing giant Didi Global Inc 8.02 billion yuan ($1.19 billion) after a probe found that the app had violated laws related to data security.

The Cyberspace Administration of China (CAC) said Didi had illegally collected user information over a seven-year period starting from June 2015.

Didi was also accused of data processing practices that brought "serious security risks to the security of the country's key information infrastructure and data security."

"Didi's violations of laws and regulations are serious, and should be severely punished," said the regulator. It also fined the company's founder and Chief Executive Cheng Wei and President Jean Liu 1 million yuan each.

The CAC accused Didi of illegally storing identification information of more than 57 million drivers in plain text instead of a more secure format.

Regulators also said that Didi had analyzed passengers' personal details without their knowledge, including photos on their mobile phones and facial recognition data.

Didi long under investigation 

The investigation into Didi has been considered one of the highest-profile cases in Beijing's clampdown on China's tech sector. 

"Prior to the conclusion of this, there were a lot of fears in markets that there would be more than just a fine. Now, with it settling as just a fine, it's lighter than what the possible implications were initially feared," Samuel Siew, Market Specialist at CGS-CIMB securities Singapore told Reuters news agency.

Didi had announced an Initial Public Offering (IPO) in the United States in 2021, even though the CAC had urged the company to put it on hold while a cybersecurity review of its data practices was conducted, 

Subsequently, the regulator announced its inquiry into the company on June 30 last year. Didi was asked to stop registering new members, and mobile app stores were told to remove 25 apps run by the company. 

Didi announced it would de-list from the New York Stock Exchange in December, and received a nod from shareholders last month.

The restrictions have hit Didi badly and also allowed competitors such as Geely and SAIC Motor Corp Ltd to gain market share. 

tg/wmr (Reuters,AFP)