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China fines its Uber equivalent USD 1.19 billion

On Thursday, China’s cybersecurity regulator stated that it has fined Didi Global Inc 8.026 bn yuan (USD 1.19 bn), concluding a probe that forced the ‘Asian Uber’ to delist from New York within a year and it cast a gloom over the Chinese tech sector, Reuters reported.

The Cyberspace Administration of China (CAC) stated its investigation found Didi had illegally collected millions of pieces of user information over a seven-year period starting June 2015, and carried out data processing activities that seriously affected national security.

In an unusual move, the CAC said it had also fined the company’s founder and Chief Executive Cheng Wei and President Jean Liu one million yuan (USD 150,000) each. “Didi’s violations of laws and regulations are serious, and should be severely punished,” the agency said.

China fined the ride-hailing giant Didi $1.2 billion for data security violations, Beijing’s latest regulatory move against a once-rising sector.

— The New York Times (@nytimes) July 21, 2022

Didi wears sackcloth and ashes

In a statement on its Weibo account, the ride-hailing giant stated that it accepted the CAC’s decision and would conduct comprehensive self-examination and rectification.

The regulator did not say in its Thursday statement whether it would allow the apps to return to app stores or allow new user registration.

Didi had previously said it would need to apply for the apps to be restored.

The restrictions allowed rival ride-hailing services operated by automakers Geely and SAIC Motor Corp Ltd to gain market shares.

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The CAC announced its inquiry shortly after the company listed its initial public offering (IPO) in the US on June 30, 2021. It also ordered app stores to remove 25 mobile apps operated by Didi and told the company to stop registering new users, citing national security and the public interest.

In December, the company released a statement saying it would delist from the New York Stock Exchange, and received the shareholders’ nod for the plan last month.

Shares of Didi had soared in the IPO, giving the company a valuation of USD 80 bn marking the biggest US listing by a Chinese company since 2014. By the time of its delisting, its shares had lost over 80 percent in value.

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