Didi, the “Chinese Uber” threatened with a record fine in China

Posted on Jul 23, 2021, 1:17 PMUpdated on Jul 23, 2021, 1:18 PM

Another blow for Didi, the Chinese application for cars with drivers (VTC). According to information from Bloomberg, Beijing is considering unprecedented sanctions against the “Chinese Uber”.

The Chinese platform, which recently went public on Wall Street, is the target of an investigation in connection with its collection of private data.

Several searches at headquarters

By order of the authorities, the application can no longer be downloaded, a measure of no consequence for Didi users who have already installed it on their phone.

Regulators and investigators from several ministries disembarked last week at Didi headquarters to review security issues around personal data, an operation of unprecedented magnitude.

These setbacks come after the raising of 4.4 billion dollars (3.7 billion euros) by Didi when it entered the New York Stock Exchange at the end of June, to which Beijing was not favorable.

“Exemplary” sanctions

Chinese regulators are now considering taking exemplary sanctions against the start-up, Bloomberg said Thursday.

Among the tracks mentioned: the suspension of some of its activities, the arrival in its shareholding of a public investor, even a fine that would exceed that imposed on Alibaba, writes the financial information agency Bloomberg.

Alibaba, the Chinese e-commerce giant founded by the whimsical billionaire Jack Ma, was ordered in April to pay 2.3 billion euros to the Chinese state for obstructing competition.

Beijing could also order Didi’s outright withdrawal from the Nasdaq, but no decision appears to be in place yet, according to Bloomberg.

The internationalization of Chinese firms slowed down

China has long encouraged its businesses to go global. And many of them are raising funds in the United States to develop.

But in a context of growing rivalry with Washington, especially in the field of tech, Beijing now fears that crucial data accumulated by its giants will leak abroad.

This is the reason why China wants to tighten the conditions for listing abroad for its companies, which are required beforehand to be irreproachable in terms of cybersecurity.

Founded in 2012 by Cheng Wei, a former Alibaba executive, Didi is available in 15 countries, including Russia and Australia. The company managed to oust its American rival Uber from China in 2016, after a ruthless price war.

Source: AFP

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