China fines Didi more than $1 billion for privacy breaches, sources say

China fines Didi more than $1 billion for privacy breaches, sources say
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July 19 (Reuters) – Chinese authorities are preparing to fine ride-sharing company Didi Global more than $1 billion, people familiar with the matter said on Tuesday, a move that prompted an investigation into the company’s cybersecurity could end practices methods exercises.

People said the fine would be more than 8 billion yuan (US$1.28 billion), accounting for about 4.7% of Didi’s total revenue of US$27.3 billion last year. They declined to be identified as the information has not yet been released.

The Wall Street Journal first reported the possible amount of the fine on Tuesday.

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The ride-hailing company did not immediately respond to a Reuters request for comment.

Didi’s fine would be the largest regulatory penalty imposed on a Chinese tech company since e-commerce giant Alibaba Group (9988.HK) and delivery giant Meituan (3690.HK) were fined US$2.75 billion and US$527 million by China’s antitrust authorities last year.

Alibaba’s fine represented about 4% of its 2019 domestic sales, while Meituan’s represented 3% of its 2020 domestic sales.

Didi’s punishment could pave the way for Beijing to ease a restriction that bans it from adding new users to its platform and allowing its apps to be restored on domestic app stores.

Didi was co-founded in 2012 by former Alibaba employee Will Wei Cheng and backed by SoftBank Group (9984.T) and Uber Technologies (OVER.N)previously set aside 10 billion yuan for a possible fine, Reuters previously reported.

Didi logo is seen on the facade of the company’s headquarters in Beijing, China, 9 November 2021. Picture taken November 9, 2021. REUTERS/Yilei Sun

The company has struggled to get its business back to normal after angering Chinese regulators by pushing its $4.4 billion listing in New York in June 2021, despite being asked to float up to lay ice.

Days after Didi’s IPO, China’s powerful internet watchdog, the Cyberspace Administration of China, launched a cybersecurity investigation into the company’s data practices and ordered app stores to remove 25 mobile apps powered by Didi.

The restrictions have weakened Didi’s dominance, allowing competing ridesharing services from automakers Geely (GEELY.UL) and SAIC Motor (600104.SS) to gain market share.

The company announced it would delist from the New York Stock Exchange in December and won shareholder approval for the plan in May. Continue reading

Didi’s shares skyrocketed during its initial public offering (IPO), valuing the company at $80 billion. It was the largest US listing of a Chinese company since 2014.

In addition to Didi, the CAC has also launched full truck alliance cybersecurity reviews (YMM.N) and the online recruitment company Kanzhun Ltd. July 2021.

Kanzhun and Full Truck Alliance said June 29 the regulator gave their apps the green light to resume new user registrations. Continue reading

($1 = 6.7405 Chinese renminbi yuan)

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Reporting by Julie Zhu and Xie Yu in Hong Kong; Yingzhi Yang in Beijing and Nivedita Balu in Bengaluru; Edited by Aditya Soni and Edmund Blair

Our standards: The Thomson Reuters Trust Policy.

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