China Cracks Down On DiDi Days After US IPO
Just days after Chinese transport company DiDi pulled off one of the largest US initial public offerings (IPO) this decade, a Chinese cybersecurity regulator has ordered it to be removed from all Chinese smartphone app stores. Regulators have accused DiDi of illegally collecting and using customer’s data.
Two days after announcing a cybersecurity review of DiDi, China’s Cyberspace Administration ordered Chinese app stores to remove DiDi from the platforms entirely, claiming the company has severely violated regulations surrounding personal data. Regulators also requested that DiDi rectify all existing problems in line with national standards to protect personal data of DiDi’s many users.
On Friday, DiDi said it would fully cooperate with the government’s review. Aside from the suspension of new DiDi users, the company has insisted there will be no service interruptions for those already using the app. DiDi is not the only company to face tough crackdowns by Chinese regulators. Tencent, Alibaba, and JD.com are amongst others who have also been targeted. Action by the regulators aims to curb risk and prevent unfair labour practices.
The regulatory scrutiny surrounding DiDi follows its Wall Street debut, where the company raised $4.4 billion from investors in one of the biggest IPOs in recent memory. DiDi’s first day on the New York Stock Exchange drew to a close with a market capitalisation of approximately $75 billion, making the company’s president a new billionaire.