China fines Didi, China’s Uber, more than 1 billion euros

The China Cyberspace Administration (ACC) announced Thursday, July 21, that the leader of China’s car reservation service, Didi, has been fined 8.026 billion yuan (about 1.2 billion euros) for violating cybersecurity rules. This is one of the largest fines levied on a company in China, after the €2.7 billion one targeting Alibaba, in 2021. And it comes down to a particularly painful saga for Didi, since the Chinese web regulator launched its investigation just a few days after the group rolled out on Wall Street , which enabled it to raise $4.4 billion (€4.3 billion) on June 30, 2021, worth $67 billion.

Throughout the investigation, Didi was banned from Chinese app stores and banned from recruiting new users. In December 2021, the company announced its exit from the American Stock Exchange, which took effect four months later. Meanwhile, the stock price is down 80%.

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After Didi, the case threw a heavy response to the Chinese tech giants, who have already been criticized for a series of attacks from various regulators in the country since the end of 2020 and the cancellation of the presentation on the exchange of the financial subsidiary of Alibaba. After tightening the rules governing online finance, and then those governing sales and delivery platforms, the authorities have opened a new chapter in their campaign, with the thorny issue of data security.

For a long time to corporate appreciation, it is the subject of increased attention of public authorities. Beijing adopted its first cybersecurity law in 2017, notably requiring companies to keep data on Chinese users in the country. In 2021, the country adopted a new text specifically targeting the issue of data collection and use. As is often the case in China, the text is vague and leaves plenty of room for the authorities. The real challenge for companies, required compliance.

‘Severe risks’

With Didi, Beijing is sending them a clear message. In its press release, the ACC claims to have ‘Indisputable proof’ That Didi repeatedly violated Chinese law: [Ses] The illegal operations posed serious risks to the country’s strategic information infrastructure and data security. » The company is accused of storing the identity information of more than 57 million drivers in an insecure format and analyzing user data, including their photo and phone number, without informing them. Didi was also accused of not taking action to rectify the situation, despite several calls for orders to be issued. In addition to the penalties imposed on the congregation, its two leaders, Cheng Wei and Liu Qing, were each fined 1 million yuan.

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