The authorities in China on Thursday fined the country’s ride-hailing giant, Didi, $1.2 billion for data security violations, the latest in a string of regulatory actions that have laid low China’s once-soaring internet sector.
The penalty, announced by China’s internet regulator, the Cyberspace Administration of China, ended a yearlong investigation into the data practices of the ride-sharing giant that spoiled a blockbuster listing in the United States and ultimately led to a decision to delist from the New York Stock Exchange. The regulator said it would also fine two top executives at the company.
The firm violated several Chinese data security laws, the regulator said, by collecting millions of addresses, phone numbers, images of faces, and other data.
The eye-watering fine most likely clears the way for the one-time Wall Street-darling to list its shares in Hong Kong. But the regulator’s announcement did not mention whether it would allow Didi to put its app back on Chinese app stores and to restore its ability to register new users. The government had imposed the restrictions on Didi’s operations last July as part of its investigation.
Some analysts have argued there are signs that a frenzied period of rule-making and harsh enforcement by China’s regulators may be on the wane. Even so, more government oversight and a willingness to punish China’s innovation leaders appears to have become the new normal. In this month alone, China’s antitrust regulator punished Didi and other internet firms for failing to report mergers for antimonopoly review, while the country’s central bank fined Didi for mishandling customer data.
In a long list of infractions that included excess collection of data, the Cyberspace Administration of China singled out Didi’s chief executive and founder, Cheng Wei, and its president, Jean Liu. Each was fined roughly $150,000.
“Didi’s illegal operations have brought serious security risks to the security of the country’s key information…