China investigates other US-listed tech giants after cracking down on Didi
(CNN) – Just a day after carpooling giant Didi was banned from app stores in China, authorities began investigating three other major tech services, citing concerns about the security of national data.
The companies under investigation recently went public in the United States, although geopolitical tensions between the two countries remain high and Chinese authorities crack down on tech companies.
China’s cybersecurity watchdog on Monday announced investigations into the Yunmanman and Huochebang truck delivery platforms, as well as the Boss Zhipin job site. New users cannot register for these three apps during the survey.
Yunmanman and Huochebang are the two main Chinese truck calling apps and are called “Uber for trucks”. They merged in 2017 to create a new company – Full Truck Alliance, listed on the New York Stock Exchange last month, and currently valued at $ 21 billion.
Boss Zhipin is one of the largest online job posting platforms in China. Its parent company Kanzhun was listed in New York City last month and has a market capitalization of nearly $ 15 billion.
The Cyber ââSecurity Review Office said in a statement that the investigations were being undertaken to “prevent national data security risks, maintain national security and protect the public interest.”
Full Truck Alliance said in a statement that it will actively cooperate with the investigation and conduct a thorough check on the security of its network.
Didi Chuxing banned
The announcement came just hours after the Chinese Cyberspace Administration (CAC) banned Didi, the country’s largest ridesharing service, from app stores after saying it posed a cybersecurity risk for customers. . The CAC is the primary internet regulator in China, and its Cyber ââSecurity Review Bureau division is responsible for reviewing cybersecurity risks.
âThe Didi Chuxing app has seriously broken the laws by illegally collecting and using personal information,â CAC said on Sunday. He asked Didi to resolve the issue with his app to comply with the country’s laws and keep his customers safe.
Didi, who has 377 million active users in China alone, said in a statement it is complying with China’s requirements, removing the app from stores as it strives to make changes to its application to satisfy regulators. The company said customers and drivers who have already downloaded the app will not be affected.
“We sincerely thank the (…) department for their instructions in troubleshooting Didi’s risks,” Didi said. “We will rectify and improve risk prevention andâ¦ provide safe and convenient services to our users.”
Didi’s ban comes less than a week after its IPO on the New York Stock Exchange in the largest US share offering by a Chinese company since Alibaba debuted in 2014.
Two days later on Friday, China launched an investigation into Didi and suspended registration of new users on the app. The Didi share price fell on Friday.
The suspension was aimed “at preventing national data security risks” and in accordance with the National Security Law and Cyber ââSecurity Law, the Cyber ââSecurity Review Office said in a statement on Friday. The wording was exactly the same as his statement on Monday on Yunmanman, Huochebang and Boss Zhipin.
Global Times, a state-run tabloid, said Sunday that Didi’s ability to perform “big data analysis” on people’s behaviors poses potential risks.
“[We] must never let an Internet giant become a super database of personal information about the Chinese that contains even more details than the state, let alone give them the right to use this data at will “, the newspaper said in a comment.
“Especially for a company like Didi, which is listed in the United States and whose first and second shareholders are all foreign companies, the state must strictly regulate the security of its information,” he said. “This is not only to maintain the security of personal information, but also to maintain national security.”
Based on laws cited by regulators, Didi is likely under investigation for purchasing certain products and services from other vendors, which could threaten national data security, Ping An analysts say. Securities, based in Shenzhen.
âDidi will inevitably have to check its core network equipment, high performance computers and servers, large capacity storage equipment, large databases and application software, network security equipment and cloud computing services,â sort them and make the necessary adjustments to meet regulatory requirements. requirements, âanalysts wrote in a note Monday.
Yang Sirui, chief analyst for the computer industry at Bank of China International, said Didi had rushed for its IPO in the United States, possibly due to pressure from investors.
“Didi’s registration at the earliest meets the requirements of the capital,” he said. “But if [Didi] arbitrarily collected, abused, or monetized user privacy data, he will inevitably be punished by Chinese regulators. “
Since its creation in 2012, Didi has been the subject of several private fundraisers, raising tens of billions of dollars from venture capitalists and large tech companies. According to its IPO prospectus, SoftBank Vision Fund is currently Didi’s largest shareholder, with a 21.5% stake. Uber and Tencent followed with 12.8% and 6.8% respectively.
Regulatory actions against Didi and other companies are part of a broader crackdown on big tech companies in China.
In March, Chinese President Xi Jinping stressed the need to regulate “platform” companies in the country. In recent months, several tech companies have come under investigation for suspected monopoly behavior or violation of customer rights, resulting in record fines and massive reviews.
In April, Alibaba, the online shopping giant co-founded by Jack Ma, was fined a record $ 2.8 billion after antitrust regulators concluded the company had behaved like a monopoly. Within days of the fine, Ant Group, another part of Jack Ma’s business empire, was ordered to review its operations and become a financial holding company overseen by the central bank.
Yang of Bank of China International said Didi faces a different type of investigation.
As a large ridesharing platform, Didi has sensitive data that may be relevant to national security, such as location data, he said.
– Alexis Benveniste and the Beijing office of CNN contributed to this report.
This story first appeared on CNN.com, “China investigates other US-listed tech giants after cracking down on Didi. “