China fines Didi Global $1.2 billion for violating cyber and data security laws

The China Cyberspace Administration (CAC) said in a statement that the company had violated the country’s Cyber ​​Security Law, Data Security Law and Personal Information Protection Law.

The statement added that “the facts of the violation of laws and regulations are clear, the evidence is conclusive, the conditions are serious, and the nature is despicable.”

Aside from the $1.19 billion fine, the regulator also imposed a personal fine of 1 million yuan ($147,000) on Didi’s chairman, CEO Cheng Wei, and president Liu Qing, respectively. Liu Qing is also known as Jean Liu in English.

In a separate statement, the Anti-Corruption Agency said investigators found Didi committed 16 violations of the law, including illegally obtaining certain information from users’ smartphones and collecting data about facial recognition, age, jobs and family relationships.

It added that the company “avoided fulfilling the express requirements of regulatory authorities, and maliciously evaded supervision,” and that the company’s “illegal operations” brought “serious security risks to China’s information infrastructure security and data security.”

Just days after Didi went public for $4.4 billion on Wall Street on June 30, 2021, the regulator banned Didi from app stores in the country and launched an investigation into its handling of customer data. Authorities accused Didi of breaching privacy laws and posing cybersecurity risks. Their actions are also widely seen as punishment for the company’s decision to go abroad instead of to China.

Regulatory actions made the company the poster child for Beijing’s crackdown on tech companies, and wiped out tens of billions of dollars of market capitalization.

It also hurt Didi’s local business. The company reported a loss of $4.7 billion in the third quarter of 2021. Its revenue was down 1.7% from the same period the previous year.

Under pressure from Chinese regulators, Didi announced in December that it would begin the process of delisting from the New York Stock Exchange and moving to Hong Kong. In May, Didi shareholders voted to allow the company to delist it from the New York Stock Exchange.

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Shortly after the regulator’s announcements, Didi Global responded in a statement Thursday that it “sincerely” accepts the regulator’s imposition of administrative penalties.

“We sincerely accept this decision and firmly obey it. We will strictly follow the penalty decision and the requirements of relevant laws and regulations, conduct a comprehensive and in-depth self-examination, and actively cooperate with careful supervision and complete correction,” he said.

“We will take this as a warning and further strengthen the construction of cyberspace and data security, strengthen personal information protection, and seriously fulfill our social responsibilities. We will serve every passenger, driver and partner well, and achieve security, healthy and sustainable development of the enterprise.”

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