© Reuters. FILE PHOTO: A navigation map in the app of Chinese ride hailing giant Didi can be seen on a mobile phone in front of the app logo shown in this illustration image dated July 1, 2021. REUTERS / Florence Lo / Illustration
BEIJING (Reuters) – China’s cyberspace administration announced on Sunday that it had ordered smartphone app stores to stop offering the ride-sharing company Didi Global Inc’s app after it was discovered that Didi illegally collected users’ personal information.
The Cyberspace Administration of China () announced on its social media feed that it had instructed Didi to make changes to comply with Chinese data protection regulations. The nature of Didi’s injury was not specified.
Didi replied that it had stopped registering new users and would remove its app from the app stores. It said it would make changes to comply with the rules and protect users’ rights.
Didi did not immediately respond to a request to explain why the policy was updated that day.
Didi debuted in New York on Wednesday after a $ 4.4 billion initial public offering (IPO).
Didi was valued at $ 67.5 billion when it went public, well below the hoped-for $ 100 billion that potential investors had resisted.
Kirk Boody, director of Redex Research, which publishes on Smartkarma, said the move by CAC was aggressive, but Didi was banned from adding new users anyway during a cybersecurity review.
“It suggests that the process could take a while, but they have a large installed base so the short-term effects (are) are likely to be muted for now.”
Didi’s app still worked in China for people who had already downloaded it. It offers an average of over 20 million trips a day in China
CAC on Friday announced an investigation into Didi aimed at protecting the “national security and public interest” that caused the share price to fall 5.3% to $ 15.53.
The stock sold for $ 14 when it went public – the top of the marked range.
Chinese regulators have tightened data collection rules for large technology companies in recent years.
Didi, which provides services in China and more than 15 other markets, collects huge amounts of real-time mobility data every day. It uses some of the data for autonomous driving technologies and traffic analyzes.
The company, founded by Will Cheng in 2012, has already been the subject of regulatory investigations into safety and operating permits in China.
Didi set out relevant Chinese regulations in his IPO prospectus and stated: “We follow strict procedures for the collection, transmission, storage and use of user data in accordance with our data security and data protection guidelines.”
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