China cracks down on more new-economy companies

Chinese regulators have extended probes into the country’s US-listed tech companies, with a state-controlled tabloid calling for more strict information security supervision on Didi Global, particularly since its top two shareholders – SoftBank and Uber Technologies – were foreign.

Didi undoubtedly has the most detailed travel information on individuals among large internet firms and appears to have the ability to conduct “big data analysis” of individual behaviors and habits, Global Times wrote yesterday.

To protect personal data as well as national security, China must be even stricter in its oversight of Didi’s data security, given that it is listed in the US and its two largest shareholders are foreign companies, the newspaper added. “We must never let any internet giant control a super database that has more detailed personal information than the state, let alone giving it the right to use the data at will,” Global Times said in the commentary.

Didi has incensed Chinese regulators as it went public in the US stock market before the centenary of China’ ruling Communist Party, regardless of the regulators’ repeated efforts to persuade it not to list in the US. Local media, citing sources, said the mainland ride-hailing giant may face a heavier punishment than Alibaba had faced.

After Didi, China has launched cybersecurity probe into more US-listed firms.

China’s cyberspace watchdog said yesterday it is investigating online recruiter as well as truck-hailing apps Huochebang and Yunmanman, ramping up a crackdown on the mainland’s tech companies amid tightened regulations on data security.

The announcement came a day after the Cyberspace Administration of China ordered a suspension of app downloads for Didi Global.

The three app-based businesses should halt new user registrations during the review, the CAC said in a statement.

Investors responded by dumping Chinese tech stocks in Hong Kong, including Tencent and Meituan, and sending shares of SoftBank Group to a seven-month low in Tokyo.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.