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Didi, the Chinese Version of Uber, Falles Into US Regulators’ Crosshairs
Didi, the Chinese version of Uber, became a regulatory target 48 hours after it floated in New York, wiping $22bn from its market value. The Securities and Exchange Commission (SEC) regulates the US stock markets, and requires Chinese companies to disclose listing permission. As a result, Pinduoduo’s Colin Huang stepped down as chief executive and Bytedance’s Zhang Yiming resigned as CEO.
a national security threat
U.S. regulators are increasingly scrutinizing Chinese technology firms. CFIUS recently forced Beijing Kunlun Tech to sell the gay dating app Grindr due to concerns that the Chinese government might access the data. A similar ruling quashed Broadcom’s bid to buy Qualcomm because of concerns that China could develop 5G technology. However, the current situation isn’t all gloom and doom for the Chinese-founded video-sharing company.
TikTok’s relationship with China has already led to several lawsuits and a national security review. A US college student named Misty Hong filed a class action lawsuit alleging that TikTok had transferred user data to China without her consent. The privacy policy previously permitted the site to send personal information to Chinese servers. However, this policy is now in doubt, as a censorship lawsuit has been filed against the company.
Despite the growing influence of the TikTok app, the Chinese government is not yet allowing the U.S. government to censor content on the app. Chinese authorities could collect data about individual users and use it to target them directly or use the data to attack the US. Despite the US government’s efforts to ban TikTok, it still remains unclear how the company plans to respond to the threat.
Didi’s withdrawal from app stores wiped out $22bn in market value
Didi has lost over $22 billion in market value after being barred from the App Store in China. The decision came after the Cyberspace Administration of China (CSC) tightened its grip on online data and security. The company only trades in New York since June 30, when it was suspended from the other markets. However, it still allows users to order a ride using its app.
Didi is a Chinese vehicle-hire company with 550 million users and tens of millions of drivers. Apart from offering on-demand transport, the company also provides automobile services such as sales, leasing, fleet operation, electric vehicle charging, and co-develops cars with carmakers. In order to keep up with its growing user base, Didi also invests in vehicle development in conjunction with global carmakers.
Didi’s ad revenue plummeted
Didi, a Chinese ride-hailing startup, has fallen into the crosshairs of Beijing and its regulators. By going public in the middle of a year of crackdowns on Big Tech companies, the company has turned itself into a pawn for something larger than itself. What Xi’s intentions are towards entrepreneurs and disruptors could be revealed by the fate of Didi.
China has launched cybersecurity investigations and banned the company from its app stores. The Cyberspace Administration of China, which regulates cybersecurity, is accusing Didi of violating privacy laws and posing cybersecurity risks. Didi’s actions have triggered a massive panic among investors, and its stock fell by 20% on the first day of trading. But there are some bright spots in Didi’s trouble.
The company agreed to upload its entire data after the murders and improved its safety features. It also fired its manager, Ms. Huang, and employed 1,000 Communist Party members to serve as customer service agents. However, the company’s decision to hire Communist Party members to drive the taxis was criticised by many as sexist. The company’s ad revenue plunged, but its management is trying to rebuild its brand image.
