China’s Didi fined $1.2 billion for 16 cybersecurity violations

July 21, 2022 0 Comments

The year long probe of Didi, China’s ride-hailing giant, has come to an end on July 21. China’s Cyberspace Administration of China (CAC) announced its decision on Didi’s breach of cybersecurity case. A fine of RMB 8.026 billion (USD$1.19 billion) is imposed on Didi Global Co., Ltd. and a fine of RMB 1 million(USD$ 147,889) each is imposed on Cheng Wei, CEO of Didi, and Liu Qing, President of Didi.

CAC’s inspection on Didi found the company had 16 violations of the country’s cybersecurity laws, data security laws, and personal information protection laws. Didi’s violation includes  illegal collection of 11,963,900 screenshots from users’ albums, excessive collection of 107 million facial recognition information, 53,509,200 pieces of age group information, 16,335,600 pieces of occupation information, 1,382,900 pieces of kinship information, and collecting 142,900,000 pieces of drivers’ education information and storing 57,802,600 drivers’ national ID number in explicit forms.

In addition, the CAC says that “Didi has other illegal and non-compliant issues such as data processing activities that seriously affect national security, as well as refusal to fulfill the clear requirements of the regulatory authorities, and malicious evasion of supervision.“ The specifics of how Didi’s operation dangers national security remains undisclosed, in accordance with the law.

Didi’s probe was initiated a year ago in July, shortly after the company launched its IPO in New York on June 30, 2021, and raised $4.4 billion at $14 a share, equating a valuation of $73 billion. Didi shares crashed 20% after Chinese regulators opened their investigation and removed Didi apps from multiple app stores.

Didi’s fine accounts for approximately 4.7% of its $27.3 billion total revenue last year, and is the largest regulatory fine imposed on a tech company in China since Alibaba. In April last year, China’s e-commerce forerunner Alibaba was finned $2.75 billion due to monoply and malicious competition issues. The fine amounted to about 4% of Alibaba’s 2019 domestic total sales.

 

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