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Ride-hailing app Didi removed from Chinese app stores over data collection violations: Report

In a bid to control data collected by tech firms, China has been reportedly enacting new laws and increasing oversight of platform companies.

The Cyberspace Administration of China (CAC) on Sunday ordered app stores to remove ride-hailing app Didi Chuxing, the most popular ride-hailing app in China, citing serious violations on the collection and usage of personal data, Bloomberg reported. No further elaboration was offered by the CAC.

The decision came two days after the regulator started a cybersecurity review of the company and froze it from adding new users. Didi has been asked to make changes and comply with China’s data protection rules, the report added. The company collects vehicle mobility data for various reasons including improving autonomous driving technologies and traffic analysis.

The new order requires companies like Apple, Huawei, and Xiaomi to remove Didi from their respective app stores, but users who already have the app on their phones can continue to use it. Didi offers over 20 million rides in China every day.

Last Wednesday, Didi Global launched an initial public offering (IPO) in the US in which it raised about $4.4 billion dollars, giving it a market value of nearly $68 billion and making it the second-largest US listing by a Chinese company after Alibaba. The ride-hailing giant acquired Uber’s China operation in 2016.

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The Chinese government is currently scrutinising Didi and other internet firms over issues ranging from antitrust to data security.

“What started out as a government crackdown on anticompetitive practices among Chinese internet giants has grown into a broader effort to clean up how the country’s fast-growing—and, until recently, freewheeling—tech sector operates.” – Wall Street Journal

China’s expanding control over data collected by tech companies

China has been expanding and strengthening its control over data collected by tech companies, domestic and foreign, by enacting new laws and measures, The Wall Street Journal reported on June 12. The government has been demanding companies like Tencent, Alibaba, and ByteDance to open up the data they collect from users to help the government make “objective and accurate analyses.” These demands are driven by the belief that the government should be able to access the huge troves of data collected by tech giants and the worry that tech giants might create alternative power centres in the country, the report stated.

The following two laws, which build on the 2017 Cybersecurity Law, “will subject almost all data-related activities to government oversight, including their collection, storage, use and transmission,” the report stated:

Data Security Law: The Data Security Law, which was passed in early June and goes into effect on September 1, sees private-sector data classified according to its importance to the interests of the state. The vaguely worded provision will make it easier for authorities to demand data they deem essential to the state and make it harder for businesses to refuse, the report stated.

Personal Information Protection Law: The proposed Personal Information Protection Law, which was updated by China’s legislature in April, limits the types of data that private-sector firms can collect. But unlike the European Union’s data protection regulation, on which it is modelled, the Chinese version does not place any restrictions for data collection by government entities, the report stated.

Cracking down on monopolies

Earlier in March, Bloomberg reported that the Chinese government is cracking down on monopolies by “platform” companies and increasing oversight into them. A month earlier, the country unveiled its anti-monopoly rules, primarily targeting the monopolistic behaviour of big tech companies.

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The term “platform company” can refer to several of the internet-based companies that have come up in China in the past decade or so, such as e-commerce companies JD.com, Pinduoduo, and food delivery company Meituan. According to the report, the platform companies were operating in “non-standardised” ways that pose risks. “It is necessary to accelerate the improvement of laws governing platform economies in order to fill in gaps and loopholes in a timely fashion,” read the minutes of the officials’ meeting, according to the report.

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