Didi, China’s largest ride-hailing service, continues to face increasing regulatory scrutiny.
Didi was removed from app stores on Sunday by China’s Cyberspace Administration, which claimed it posed a cybersecurity risk to customers.
“Didi Chuxing app is found to have severely violated the laws by illegally collecting and using personal information,” the regulator said. It called on Didi to fix the issue with its app to comply with the country’s laws and to ensure its customers’ safety.
It demanded that Didi fix the problem with its app in order to comply with the country’s laws and ensure the safety of its customers.
In a statement, the company, which has 377 million active users in China alone, said it is complying with China’s demands by removing the app from stores while it works to make changes to the app to satisfy regulators. Customers and drivers who have already downloaded the app will be able to keep using it, according to Didi.
“We sincerely thank the … department for its instruction in troubleshooting Didi’s risks,” the company said. “We will rectify and improve risk avoidance and … provide safe and convenient services to our users.”
The ban comes less than a week after Didi went public on the New York Stock Exchange, making it the largest Chinese company to go public in the United States since Alibaba in 2014.
China suspended the registration of new users on the app two days later, on Friday. According to a statement from the country’s cyberspace administration, the suspension was put in place “to prevent the expansion of risk” during a “cybersecurity review” of the company. The stock price of the company plummeted on Friday.
The ban imposed on Didi on Sunday is a step up in China’s action against the company, but it’s part of a larger crackdown on Big Tech companies in the country.
In March, Chinese President Xi Jinping emphasized the importance of regulating “platform” companies, or businesses that provide customers with online services. Several tech companies have been investigated in recent months for alleged monopolistic behavior or customer rights violations, resulting in record fines and massive overhauls.
Several tech companies have been investigated in recent months for alleged monopolistic behavior or customer rights violations, resulting in record fines and massive overhauls. President Xi Jinping has backed the investigations, designating regulatory crackdowns as one of the country’s top priorities for 2021, and continuing to call on regulators to scrutinize tech firms.
Antitrust regulators fined Alibaba (BABA), the online shopping behemoth co-founded by Jack Ma, a record $2.8 billion in April after concluding the company had acted like a monopoly. Ant Group, another part of Jack Ma’s business empire, was ordered to overhaul its operations and become a financial holding company supervised by the central bank just days after the fine was issued.
Following these crackdowns, China’s State Administration for Market Regulation gathered 34 businesses and issued a warning to stop any anti-competitive behavior, as well as ordering internal inspections. Didi was one of the companies summoned.
