China orders suspension of Didi app downloads over data breach

BEIJING, July 4 (Reuters) – China’s cyberspace regulator said on Sunday it had ordered smartphone app stores to stop offering Didi Global Inc’s (DIDI.N) app after discovering that the giant of carpooling had illegally collected users’ personal data.

The Cyberspace Administration of China (CAC) said it asked Didi to make changes to comply with China’s data protection rules, four days after Didi started trading on the New York Stock Exchange, after raising 4 , $ 4 billion in an initial public offering.

The CAC did not elaborate on the nature of Didi’s violation in a statement on its social media feed.

Didi responded by saying that he had stopped registering new users and would remove his app from the app stores. He said he would make changes to comply with the rules and protect user rights.

China has cracked down on its local tech giants over antitrust and data security concerns.

Didi made her trading debut on Wednesday in an IPO that valued the company at $ 67.5 billion, well below the $ 100 billion she was hoping for, which potential investors had resisted.

Redex Research director Kirk Boodry, who posts on Smartkarma, said the ACC decision appeared “aggressive.”

“(This) indicates that the process might take a while, but they have a large installed base, so the short-term impact (is) likely to be mitigated for now,” he said.

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Didi’s app still worked in China for people who had already downloaded it. It averages over 20 million trips in China every day.

The ACC on Friday announced an investigation into Didi to protect “national security and the public interest,” causing its share price to fall 5.3% to $ 15.53.

The stock was sold for $ 14 per share on the IPO – the top of the range shown.

Didi, which provides services in China and more than 15 other markets, collects large amounts of real-time mobility data every day. It uses some of the data for autonomous driving technologies and traffic analysis.

Didi had pointed out the Chinese regulations in its IPO prospectus and said, “We follow strict procedures for collecting, transmitting, storing and using user data in accordance with our security and privacy policies. data”.

A notice on Didi’s China app showed he updated his user information and data privacy policy on June 29, the day before his business debut. In a statement to Reuters, Didi called the move a “regular update” after adding two new services to the app as part of his business as a driver.

Founded by Will Cheng in 2012, the company had previously been the subject of regulatory investigations in China over safety and its operating license.

Reporting by Yilei Sun and Tony Munroe, Scott Murdoch in Hong Kong; Editing by Kevin Liffey

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