Didi faces fine of over $1 billion for data breach, report says

0

Chinese authorities are preparing to fine ride-hailing company Didi Global more than $1 billion, people familiar with the matter said on Tuesday, a move that could end an investigation into the company’s cybersecurity practices. ‘company.

People said the fine would be more than 8 billion yuan ($1.28 billion), which is about 4.7% of Didi’s $27.3 billion in earnings last year. . They declined to be identified as the information has not yet been made public.

The Wall Street Journal first reported the potential fine earlier on Tuesday.

The ride-sharing provider did not immediately respond to a Reuters request for comment.

Didi’s fine would be the heaviest regulatory penalty imposed on a Chinese tech company since e-commerce titan Alibaba Group and delivery giant Meituan were fined $2.75 billion and $527 million, respectively. dollars last year by China’s antitrust regulator.

Alibaba’s fine was equivalent to about 4% of its domestic sales in 2019, while Meituan’s was equivalent to 3% of its domestic sales in 2020.

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

Didi, co-founded in 2012 by former Alibaba employee Will Wei Cheng and backed by SoftBank Group and Uber Technologies, had previously earmarked 10 billion yuan for a possible fine, Reuters previously reported.

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

Days after Didi went public, China’s powerful internet watchdog, the Cyberspace Administration of China, launched a cybersecurity probe into the company’s data practices and ordered app stores to remove 25 apps. mobiles operated by Didi.

The restrictions have eroded Didi’s dominance and allowed rival ride-sharing services operated by carmakers Geely and SAIC Motor 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.

Didi’s shares soared during their IPO, giving the company a valuation of $80 billion. It was the largest U.S. listing by a Chinese company since 2014.

Besides Didi, CAC also launched cybersecurity reviews of Full Truck Alliance and online recruitment company Kanzhun.

Kanzhun and Full Truck Alliance said on June 29 that the regulator had given their apps the green light to resume new user registrations.

Share.

Comments are closed.