Ride-hailing App Didi Pulled From Chinese App Stores for Alleged User Data Violations

China’s cyberspace regulators issued an order asking ride-hailing app Didi Chuxing be pulled from smartphone app stores over alleged user data violations.

Credit: Reuters

The Cyberspace Administration of China (CAC) announced the ban against Didi on Sunday, 4 July 2021, after conducting a surprise investigation into the app just a couple of days prior. The regulators cited illegal collection and usage of users’ personal data as the reason for the ban, requiring the app to make changes in order to comply with Chinese data protection regulations. However, the exact nature of the app’s violation was not specified.

According to Reuters, the app has already been taken down and has stopped registering new users. Existing users who already have the app, though, can still use it normally as Didi announced that its operations will continue. This applies to both riders and drivers alike.

The takedown order comes after Didi’s strong debut on the New York Stock Exchange on Wednesday, 30 June, making a US$4.4 billion initial public offering (IPO). This is the largest IPO for a Chinese company since Alibaba went public at US$25 billion in 2014. Didi was valued at US$67.5 billion in the IPO.

Didi has already issued multiple statements responding to the allegations, saying that it is willing to cooperate with authorities and is in the process of making the necessary changes to comply with regulations.

Credit: Didi Global

In a separate report, Reuters added that a senior executive of Didi said that it stores all China user and road data at servers in the country, stressing that it didn’t pass anything to the United States.

“Like many overseas-listed Chinese companies, Didi stores all domestic user data at servers in China, it is absolutely not possible to pass data to the United States,” said Didi Vice President Li Min in a post on Weibo, China’s equivalent of Twitter.

Didi, which operates in China and 15 other international markets, collects real-time mobility data for use in its research of autonomous driving technologies and traffic analysis. On average, over 20 million rides are booked on the app every day.

The news of Didi’s takedown reportedly knocked 5% off Didi’s shares on Friday, 2 July. The company in a statement also said that it expects the takedown to cause an “adverse impact” on its revenue in China.

Didi is not the only Chinese company to face antitrust and data security probes. The likes of Alibaba and Tencent have similarly been investigated for these same concerns in the past. Bloomberg notes that the Chinese government is said to be looking to curb the influence of its homegrown internet companies by focusing on ownership and tightening data collection regulations.

Written by Kyle Chua