Chinese Ride-Sharing Giant Didi Global Fined More Than $1 Billion In Year-Long Cybersecurity Probe

2022-07-21 09:55:49 By : Ms. Summer Liu

Chinese authorities have decided to impose an 8 billion yuan ($1.2 billion) fine on embattled ride-sharing giant Didi Global, after a year-long investigation uncovered what was described as “serious” violations of the country’s data security laws.

The country’s now all-powerful cybersecurity watchdog, the Cyberspace Administration of China (CAC), published its decision on Thursday via the agency’s official website. Authorities have also decided to fine Didi’s Chief Executive Cheng Wei and President Jean Liu $150,000 each for their roles in the illegal activities.

In a statement published via its official account on China’s Twitter-equivalent Sina Weibo, Didi says it will resolutely abide by the decision, and conduct self-inspection to fulfill related regulatory requirements. The fine marks an important step in an investigation that was announced right after the company’s $4.4 billion initial public offering in New York. The listing reportedly never received a clear go-ahead from Chinese authorities, and all 26 of Didi’s apps were subsequently taken down from app stores in China.

In its online statement, the CAC did not say whether the apps would be allowed back online or not. Instead, it laid out a detailed account of the company’s violations, which, according to the cybersecurity watchdog, started all the way back in 2015. Didi had collected an excessive amount of personal information including users’ addresses, biometric identity as well as their screenshots stored in phone albums. The company is also found to have engaged in data processing activities that have severely endangered national security.

Didi refused to abide by regulatory requirements and evaded regulators on purpose, the CAC wrote in its statement. The evidence is clear and what the company has done is of a serious nature, it added.

The fine, which confirms earlier reports mentioning a similar amount, has led some investors to hope that Beijing might be nearing an end to its crackdown on the country’s once booming internet sector. Didi, which had seen almost 90% of its value wiped out before moving in May to delist from New York, is at the center of the storm that has also caught the likes of Tencent and fintech giant Ant Group.

The ride-sharing company has reportedly laid off thousands of employees, suffered from ballooning losses that surged five-fold to $7.4 billion in 2021, and can’t add many new users as its apps remain inaccessible in China. Didi announced towards the end of last year that it had started preparing for a listing in Hong Kong, but has also said the U.S. delisting needs to be completed first before moving to any other exchanges.