Chinese authorities to fine Didi $1 billion following cyber security review
The ride-hailing company will also reportedly be allowed to list its app on domestic app stores once again
Chinese authorities will reportedly hit ride-hailing company Didi with a $1 billion fine, following a year-long investigation into its cyber security practices.
The government also plans to ease restrictions on banning the company from adding new users to its platform and allow the organisation to restore its mobile apps to domestic app stores, according to a report from the Wall Street Journal.
Once the fine has been implemented, which would make up around 4% of Didi’s $27.3 billion total sales last year, Didi will also be able to list itself on the Hong Kong stock exchange.
IT Pro has contacted Didi for comment.
The Cyberspace Administration of China (CAC) announced a data security investigation into the ride-hailing company last year, days after it declared it was going to list on the New York stock exchange in June 2021. Authorities also ordered that the country’s app stores should remove its apps.
In June this year, the company delisted from the US exchange, telling shareholders it needed to do so to resolve its cyber security investigation.
The company was reportedly told by China’s cyber security regulators to delay its 30 June listing on the New York stock exchange over concern that public share offering documents required by US regulators could potentially contain sensitive information and data.
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This comes after the CAC introduced new rules in February 2022 which would affect how tech platforms plan to list abroad or use recommendation algorithms. Platforms with data of over 1 million users now have to undergo a security review before listing their shares overseas. The reason for the rule was to further protect network and data security as well as maintaining national security, said the CAC.
Due to heightened US-China tensions over the past few years, and after US regulators applied greater scrutiny to new listings of Chinese companies, some Chinese tech firms were contemplating launching an IPO in Hong Kong. This could see around $2 trillion worth of Chinese listings move out of US exchanges from 2024.
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