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China’s crackdown on tech companies continues as WeChat suspends new user registration: Report

Not long ago, a ride-hailing app was removed from app stores while China enacts stringent laws that would reportedly allow the government to access huge troves of data collected by tech companies. 

“We are currently upgrading our security technology to align with all relevant laws and regulations. During this time, registration of new Weixin personal and official accounts has been temporarily suspended,” Tencent said in a statement to Reuters on Tuesday. It is not clear which laws and regulations Tencent is referring to.

Weixin is the Chinese name for WeChat. The registration services are expected to be restored in early August, the Reuters report added.

Why this matters? China has been cracking down on large tech companies and WeChat’s registration suspension is the latest effect of that. This is the first time in over a decade that the popular super app has resorted to such a measure.

Ride-hailing app Didi removed from app stores

Earlier this month, the Cyberspace Administration of China (CAC) 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.

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The decision came two days after the regulator started a cybersecurity review of the company and froze it from adding new users. Didi was asked to make changes and comply with China’s data protection rules.

A few days before this order, Didi Global launched an initial public offering (IPO) in the US in which it raised about $4.4 billion dollars. Following the order, CAC proposed that any company with data on more than 1 million users must seek the agency’s approval before listing its shares overseas, CNN reported.

“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 tech companies

China has been expanding and strengthening its control over 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.

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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 and includes measures to ensure the secure storage of user data. 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.

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