China Watchdog Orders Ride-Hailing Service Didi off App Stores
Didi recently pulled off a bumper New York IPO in which it raised over $4.4 billion
China’s cyber watchdog on Sunday ordered ride-hailing service Didi be removed from app stores after investigations found its user data collection in “serious violation” of regulations.
The announcement comes just days after the Cyberspace Administration of China said it was probing the company over “cybersecurity” concerns and “to prevent security risks to national data”.
The investigation caused Didi’s shares to slide, shortly after it pulled off a bumper New York IPO where it raised over $4.4 billion.
China’s tech giants have in recent months been swept up in a regulatory crackdown — hitting companies ranging from Alibaba to Meituan — by government authorities fearful of their supersized influence on consumers.
In Didi’s case, the cyber watchdog said: “After checks and verification, the Didi Chuxing app was found to be in serious violation of regulations in its collection and use of personal information.”
It added that it was notifying online stores to remove the Didi app and asking the company to “rectify existing problems and effectively protect the personal information of users”.
In a statement, Didi said users who have already downloaded its app can continue to use it, and driver orders will not be affected.
The firm would “seriously carry out rectifications… and continue to protect user privacy and data security”, it added.
The Didi app claims to have more than 15 million drivers and nearly 500 million users, and it is often the easiest and quickest way to call a ride in crowded Chinese cities.
The watchdog did not elaborate on what national security risks were posed by Didi, but said new users could not register for the service during the investigation period.
As of Saturday, new user registration had been suspended, Didi confirmed.
Didi is the latest Chinese tech unicorn to be targeted by authorities after Alibaba’s fintech arm Ant was forced to halt a record-breaking IPO last November.