China has fined ride-hailing giant Didi more than 8 billion yuan ($1.2 billion), regulators announced Thursday, concluding a year-long investigation into alleged data security violations.

Didi has been one of the highest-profile targets of a widespread crackdown on China's tech firms, which saw years of runaway growth and the emergence of supersized monopolies.

The clampdown launched in 2021 wiped billions of dollars off the value of Chinese tech companies. Some were targeted over monopolistic behaviour while others -- such as Didi -- for cyber and national security concerns.

The probe found "conclusive evidence" that Didi had committed violations of an "egregious nature", the Cyberspace Administration of China (CAC) said in a statement.

It accused Didi of illegally storing the ID information of more than 57 million drivers in plain text instead of a more secure format.

The regulator said the firm also analysed passenger details without their knowledge -- including photos on their mobile phones and facial recognition data.

"Didi's illegal operations have brought serious security risks to the security of the country's key information infrastructure and data security," CAC said.

"Even when regulatory authorities ordered corrections, comprehensive and in-depth corrections were not carried out."

Didi's violations took place over seven years starting June 2015, according to the regulator.

CAC also accused Didi of unspecified national security violations in its data processing activities.

The firm was also found to have violated China's Cybersecurity Law, Data Protection Law and Personal Information Protection Law –- a landmark code introduced last year that is modelled on the European Union's GDPR legislation.

- Tech crackdown -

The fine amounts to more than four percent of Didi's $27.3 billion total revenue last year.

"We sincerely accept this decision (and will) resolutely obey it," the company said in a statement on social media.

"We will take this as a warning... (and) further strengthen the construction of network security and data security."

This was the largest fine imposed by Chinese authorities since e-commerce behemoth Alibaba was ordered to pay around $2.75 billion in April 2021 for anti-competitive practices.

Didi got into hot water in June last year after it pressed ahead with an initial public offering in the United States, reportedly against Beijing's wishes.

Days after it raised $4.4 billion in New York, Chinese authorities launched their cybersecurity probe, sending Didi shares plunging. 
Since then, Didi's app has been removed from Chinese stores and it has been unable to register new users.

The Wall Street Journal reported earlier this week that the fine would pave the way for Didi to list in Hong Kong and register new users.

China's tech crackdown has eased this year as it grapples with the economic fallout from its zero-Covid strategy, with the country struggling in its pursuit of 5.5 percent GDP growth.

In May, Premier Li Keqiang urged support for tech companies to list both domestically and abroad.

But there is still a strict regulatory environment: President Xi Jinping last month called for stronger oversight and better security in the financial tech arena.

Since the Didi investigation was launched in July last year, overseas IPOs from big Chinese firms have all but dried up.

Beijing now requires internet firms with more than one million users to undergo a data security review before listing overseas, partly for national security reasons as US-China tech competition heats up.

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China has fined ride-hailing giant Didi more than 8 billion yuan ($1.2 billion), regulators announced Thursday, concluding a year-long investigation into alleged data security violations.

China has fined ride-hailing giant Didi more than 8 billion yuan ($1.2 billion), regulators announced Thursday, concluding a year-long investigation into alleged data security violations. Didi has been one of the highest-profile targets of a widespread crackdown on China's tech firms, which saw years of runaway growth and the emergence of supersized monopolies. The clampdown launched in 2021 wiped billions of dollars off the value of Chinese tech companies. Some were targeted over monopolistic behaviour while others -- such as Didi -- for cyber and national security concerns. The probe found "conclusive evidence" that Didi had committed violations of an "egregious nature", the Cyberspace Administration of China (CAC) said in a statement. It accused Didi of illegally storing the ID information of more than 57 million drivers in plain text instead of a more secure format. The regulator said the firm also analysed passenger details without their knowledge -- including photos on their mobile phones and facial recognition data. "Didi's illegal operations have brought serious security risks to the security of the country's key information infrastructure and data security," CAC said. "Even when regulatory authorities ordered corrections, comprehensive and in-depth corrections were not carried out." Didi's violations took place over seven years starting June 2015, according to the regulator. CAC also accused Didi of unspecified national security violations in its data processing activities. The firm was also found to have violated China's Cybersecurity Law, Data Protection Law and Personal Information Protection Law –- a landmark code introduced last year that is modelled on the European Union's GDPR legislation. - Tech crackdown - The fine amounts to more than four percent of Didi's $27.3 billion total revenue last year. "We sincerely accept this decision (and will) resolutely obey it," the company said in a statement on social media. "We will take this as a warning... (and) further strengthen the construction of network security and data security." This was the largest fine imposed by Chinese authorities since e-commerce behemoth Alibaba was ordered to pay around $2.75 billion in April 2021 for anti-competitive practices. Didi got into hot water in June last year after it pressed ahead with an initial public offering in the United States, reportedly against Beijing's wishes. Days after it raised $4.4 billion in New York, Chinese authorities launched their cybersecurity probe, sending Didi shares plunging. Since then, Didi's app has been removed from Chinese stores and it has been unable to register new users. The Wall Street Journal reported earlier this week that the fine would pave the way for Didi to list in Hong Kong and register new users. China's tech crackdown has eased this year as it grapples with the economic fallout from its zero-Covid strategy, with the country struggling in its pursuit of 5.5 percent GDP growth. In May, Premier Li Keqiang urged support for tech companies to list both domestically and abroad. But there is still a strict regulatory environment: President Xi Jinping last month called for stronger oversight and better security in the financial tech arena. Since the Didi investigation was launched in July last year, overseas IPOs from big Chinese firms have all but dried up. Beijing now requires internet firms with more than one million users to undergo a data security review before listing overseas, partly for national security reasons as US-China tech competition heats up. You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Chinese ride-hailing giant Didi hit with USD 1.2 billion fine

Chinese ride-hailing company Didi Global is set to be fined more than one billion dollars by the Chinese financial regulators. The Cyberspace Administration of China (CAC) came down heavily upon the cab-sharing service last year, days after it had gone public with its IPO (Initial Public Offering) at the US Stock Exchange.

Chinese ride-hailing company Didi Global is set to be fined more than one billion dollars by the Chinese financial regulators. The Cyberspace Administration of China (CAC) came down heavily upon the cab-sharing service last year, days after it had gone public with its IPO (Initial Public Offering) at the US Stock Exchange. Reportedly, after the fine is unveiled, Didi Global will be allowed to add new users to its platform. When the ban was announced in June 2021, the Communist Party of China (CCP) forced the company to remove its app from the various app stores. According to those privy to the matter, Didi is also expected to file for a fresh share listing but this time in Hong Kong. The company delisted itself from the US Stock Exchange last month. The fine, expected to be around 4 per cent of Didi’s $27.3 billion total sales last year, will bring an end to a probe that was engineered by Xi Jinping as he went after nearly every big tech and internet company in China, including Alibaba and Tencent. Read More: Didi considers giving up data control to appease China: Reports It is reported that one of the major reasons for Xi's paranoia last year was that Didi was listed in the US under the precondition of sharing audit details with the US regulators. Under the CCP, Chinese companies have been restricted by Chinese law to share any kind of information with foreign entities. Such was Xi's purge process that Alibaba founder Jack Ma disappeared from the public eye for several weeks after questioning the Chinese regulators. The Ant IPO was also tanked by Politburo as it sought to teach the tech sector a lesson. In the end, Xi Jinping came on top of it as the tech behemoths quietly accepted the diktat. (With inputs from agencies) WATCH WION LIVE HERE:

Didi Global fined $1 billion by Chinese regulators; Jinping's purge process of tech sector finally complete

&nbsp;The Chinese government has been expanding its practice of taking minority stakes in private companies beyond those specialising in online news and content to firms possessing large amounts of key data, two people with knowledge of the matter said.

It has made a de facto special management stake or "golden&nbsp;share" arrangement with Full Truck Alliance Co Ltd, a Chinese platform arranging trucking services, according to one of the people.

Troubled Didi Global Inc has also been in talks about a&nbsp;golden&nbsp;share for its core ride-hailing business, a third source with direct knowledge of the matter said.

Seeking influence, Beijing began taking&nbsp;golden&nbsp;shares&nbsp;in private online media companies - usually about 1% of a firm - some five years ago. The stakes are bought by government-backed funds or companies which gain a board seat and/or veto rights for key business decisions.

Also read |&nbsp;<a href="https://www.wionews.com/world/now-china-asks-private-firms-to-migrate-data-to-government-run-cloud-services-409161">Now, China asks private firms to migrate data to government-run cloud services</a>

Authorities are now also keen to have some control over vast troves of data owned by certain companies, the sources said, adding that the data is seen as a national asset at risk of attack and misuse, including by foreign states.

"They have broadened their attention to other companies that possess strategically important data and are considered operators of critical information infrastructure," said one person with direct knowledge of how some state investors handle such stakes.

Often there is no evidence of a&nbsp;golden&nbsp;share until the share ownership is publicly registered but that can take a year or longer. More&nbsp;golden&nbsp;shares&nbsp;in data-rich companies will come to light in due course, the person said, adding that authorities were now more willing to highlight their ownership.

A separate source said a&nbsp;golden&nbsp;share had been taken in a data-rich company very recently but declined to disclose which one.

Reuters was not able to ascertain how many other data-rich firms authorities were seeking to take a&nbsp;golden&nbsp;share in.

Also read |&nbsp;<a href="https://www.wionews.com/world/china-passes-tough-new-online-privacy-law-407176">China passes tough new online privacy law</a>

The sources declined to be identified due to the sensitivity of the issue. The internet regulator, the Cyberspace Administration of China (CAC), did not respond to a request for comment.

The&nbsp;golden&nbsp;shares&nbsp;are a "sword of Damocles hanging over the heads of firms that have them, a reminder that data security is now under close watch by the authorities," said Feng Chucheng, a partner at consultancy Plenum in Beijing.

Their expanded use is in line with China's tougher stance on data protection. A new data security law went into effect in September as did other rules that compel operators of critical information infrastructure to conduct security inspections and risk assessments.

Transport platform in crosshairs

Full Truck Alliance disclosed in May that the China Internet Investment Fund (CIIF) had become a shareholder. The fund is backed by the CAC and its holding - taken sometime around 2019 or 2020 - is in essence, a special management stake arrangement, according to one source.

Full Truck Alliance and the CIIF did not respond to requests for comment.

Didi's talks about a&nbsp;golden&nbsp;share are part of a planned business restructuring, according to a separate source. That restructuring has come after Didi angered Chinese regulators by pressing ahead with a U.S. IPO despite being asked to put it on hold for a cybersecurity review, prompting authorities in July to order a takedown of its apps from app stores.

Didi also did not respond to a request for comment.

Also read |&nbsp;<a href="https://www.wionews.com/world/now-china-targets-individuals-who-help-users-bypass-great-firewall-429544">Now, China targets individuals who help users bypass 'Great Firewall'</a>

Both Full Truck Alliance and Didi are listed in the United States and the CAC launched investigations into both in July.

One source said U.S.-listed firms or those seeking U.S. listings are more likely to gain attention when authorities think about firms they want to have a special management stake in.

Online oversight

The Chinese government also remains focused on control of online content. Spotify-like Ximalaya is in discussions with a Shanghai government body for a special management stake, two sources said.

Ximalaya declined to comment. Representatives for the government body, the Shanghai Municipal Administration of Radio and Television, could not be reached for comment.

The internet content sector has had to contend with tougher oversight since 2017 when rules were amended to make government-affiliated investments in "qualified online news and information providers" compulsory. The same year, online media platforms were also required to obtain licenses to disseminate news and other content.

ByteDance, owner of TikTok and its Chinese sister app Douyin, agreed to a&nbsp;golden&nbsp;share for one of its China subsidiaries in late 2019, a year and a half before the stake in the unit was registered, according to one source.

Watch |&nbsp;China uses tech giant Huawei for surveillance?

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/china-uses-tech-giant-huawei-for-surveillance-437289/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

ByteDance did not respond to a request for comment.

It was implied that accepting a special management stake would be helpful for firms to obtain these licenses, the same source added.

Operators of news aggregators Yidian Zixun and Qutoutiao have also sold stakes to government-related entities while Sina News has sold one in an affiliated company, public filings show.

ByteDance's news aggregator Jinri Toutiao and the other three news apps all obtained operating licenses within two years of agreeing to the&nbsp;golden&nbsp;share.

Board seats held by government-related officials need not have a direct impact on day-to-day operations, a separate source said.

The CAC has sent an official, Wu Shugang, to sit on the board of the ByteDance unit in which a CIIF subsidiary holds its&nbsp;golden&nbsp;share. While Wu has an office in one of ByteDance's Beijing premises, he rarely attends meetings and ByteDance usually deals with the CAC directly, the source said.

Reuters was not able to reach Wu for comment.

The Chinese government has been expanding its practice of taking minority stakes in private companies beyond those specialising in online news and content to firms possessing large amounts of key data, two people with knowledge of the matter said.

The Chinese government has been expanding its practice of taking minority stakes in private companies beyond those specialising in online news and content to firms possessing large amounts of key data, two people with knowledge of the matter said. It has made a de facto special management stake or "golden share" arrangement with Full Truck Alliance Co Ltd, a Chinese platform arranging trucking services, according to one of the people. Troubled Didi Global Inc has also been in talks about a golden share for its core ride-hailing business, a third source with direct knowledge of the matter said. Seeking influence, Beijing began taking golden shares in private online media companies - usually about 1% of a firm - some five years ago. The stakes are bought by government-backed funds or companies which gain a board seat and/or veto rights for key business decisions. Also read | Now, China asks private firms to migrate data to government-run cloud services Authorities are now also keen to have some control over vast troves of data owned by certain companies, the sources said, adding that the data is seen as a national asset at risk of attack and misuse, including by foreign states. "They have broadened their attention to other companies that possess strategically important data and are considered operators of critical information infrastructure," said one person with direct knowledge of how some state investors handle such stakes. Often there is no evidence of a golden share until the share ownership is publicly registered but that can take a year or longer. More golden shares in data-rich companies will come to light in due course, the person said, adding that authorities were now more willing to highlight their ownership. A separate source said a golden share had been taken in a data-rich company very recently but declined to disclose which one. Reuters was not able to ascertain how many other data-rich firms authorities were seeking to take a golden share in. Also read | China passes tough new online privacy law The sources declined to be identified due to the sensitivity of the issue. The internet regulator, the Cyberspace Administration of China (CAC), did not respond to a request for comment. The golden shares are a "sword of Damocles hanging over the heads of firms that have them, a reminder that data security is now under close watch by the authorities," said Feng Chucheng, a partner at consultancy Plenum in Beijing. Their expanded use is in line with China's tougher stance on data protection. A new data security law went into effect in September as did other rules that compel operators of critical information infrastructure to conduct security inspections and risk assessments. Transport platform in crosshairs Full Truck Alliance disclosed in May that the China Internet Investment Fund (CIIF) had become a shareholder. The fund is backed by the CAC and its holding - taken sometime around 2019 or 2020 - is in essence, a special management stake arrangement, according to one source. Full Truck Alliance and the CIIF did not respond to requests for comment. Didi's talks about a golden share are part of a planned business restructuring, according to a separate source. That restructuring has come after Didi angered Chinese regulators by pressing ahead with a U.S. IPO despite being asked to put it on hold for a cybersecurity review, prompting authorities in July to order a takedown of its apps from app stores. Didi also did not respond to a request for comment. Also read | Now, China targets individuals who help users bypass 'Great Firewall' Both Full Truck Alliance and Didi are listed in the United States and the CAC launched investigations into both in July. One source said U.S.-listed firms or those seeking U.S. listings are more likely to gain attention when authorities think about firms they want to have a special management stake in. Online oversight The Chinese government also remains focused on control of online content. Spotify-like Ximalaya is in discussions with a Shanghai government body for a special management stake, two sources said. Ximalaya declined to comment. Representatives for the government body, the Shanghai Municipal Administration of Radio and Television, could not be reached for comment. The internet content sector has had to contend with tougher oversight since 2017 when rules were amended to make government-affiliated investments in "qualified online news and information providers" compulsory. The same year, online media platforms were also required to obtain licenses to disseminate news and other content. ByteDance, owner of TikTok and its Chinese sister app Douyin, agreed to a golden share for one of its China subsidiaries in late 2019, a year and a half before the stake in the unit was registered, according to one source. Watch | China uses tech giant Huawei for surveillance? ByteDance did not respond to a request for comment. It was implied that accepting a special management stake would be helpful for firms to obtain these licenses, the same source added. Operators of news aggregators Yidian Zixun and Qutoutiao have also sold stakes to government-related entities while Sina News has sold one in an affiliated company, public filings show. ByteDance's news aggregator Jinri Toutiao and the other three news apps all obtained operating licenses within two years of agreeing to the golden share. Board seats held by government-related officials need not have a direct impact on day-to-day operations, a separate source said. The CAC has sent an official, Wu Shugang, to sit on the board of the ByteDance unit in which a CIIF subsidiary holds its golden share. While Wu has an office in one of ByteDance's Beijing premises, he rarely attends meetings and ByteDance usually deals with the CAC directly, the source said. Reuters was not able to reach Wu for comment.

Fretting about data security, Chinese government expands its use of 'golden shares'

Ride-hailing service Didi Global Inc is considering giving up control of its valuable data as part of efforts to resolve a Chinese regulatory probe, Bloomberg News reported on Friday, citing people familiar with the matter.

Days after Didi’s market debut, China’s cyberspace regulator launched an investigation into the company and asked it to stop registering new users, citing national security and the public interest.

Didi, which listed in New York recently after raising $4.4 billion in an initial public offering, has put forth proposals to appease the regulator, including conceding management of its data to a private third party, the report said here on Friday.

Regulators have also shown a preference for the third party to be state-controlled, Bloomberg said, citing a source.

The company’s shares on the New York Stock Exchange rose about 5% before the opening bell. Didi did not immediately respond to Reuters request for comment.

Didi had last month denied a media report that said it was considering going private to placate Chinese authorities and compensate investor losses since it listed in the United States.

Ride-hailing service Didi Global Inc is considering giving up control of its valuable data as part of efforts to resolve a Chinese regulatory probe, Bloomberg News reported on Friday, citing people familiar with the matter.

Ride-hailing service Didi Global Inc is considering giving up control of its valuable data as part of efforts to resolve a Chinese regulatory probe, Bloomberg News reported on Friday, citing people familiar with the matter. Days after Didi’s market debut, China’s cyberspace regulator launched an investigation into the company and asked it to stop registering new users, citing national security and the public interest. Didi, which listed in New York recently after raising $4.4 billion in an initial public offering, has put forth proposals to appease the regulator, including conceding management of its data to a private third party, the report said here on Friday. Regulators have also shown a preference for the third party to be state-controlled, Bloomberg said, citing a source. The company’s shares on the New York Stock Exchange rose about 5% before the opening bell. Didi did not immediately respond to Reuters request for comment. Didi had last month denied a media report that said it was considering going private to placate Chinese authorities and compensate investor losses since it listed in the United States.

Didi considers giving up data control to appease China: Reports

Didi's shares slumped 25% in US pre-market trade on Tuesday, ahead of its first session since Chinese regulators ordered that the company's app be taken down days after its $4.4 billion listings on the New York Stock Exchange.

World Business Watch: DiDi's shares fall 25% in US pre-market trade after China cracks down

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Chinese ride-hailing giant Didi hit with USD 1.2 billion fine

Didi Global fined $1 billion by Chinese regulators; Jinping's purge process of tech sector finally complete

Fretting about data security, Chinese government expands its use of 'golden shares'

Didi considers giving up data control to appease China: Reports

World Business Watch: DiDi's shares fall 25% in US pre-market trade after China cracks down