China fines Didi more than  billion for privacy breaches, sources say

China fines Didi more than $1 billion for privacy breaches, sources say

July 19 (Reuters) – Chinese authorities are preparing to fine ridesharing company Didi Global more than $1 billion, people familiar with the matter said on Tuesday, a move that prompted an investigation into the company’s cybersecurity could end practices methods exercises.

People said the fine would be more than 8 billion yuan (US$1.28 billion), accounting for about 4.7% of Didi’s total revenue of US$27.3 billion last year. They declined to be identified as the information has not yet been released.

The Wall Street Journal first reported the possible amount of the fine on Tuesday.

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The ride-hailing firm did not immediately respond to a Reuters request for comment.

Didi’s fine would be the largest regulatory penalty imposed on a Chinese tech company since e-commerce titan Alibaba Group (9988.HK) and delivery giant Meituan (3690.HK) were fined £2 by China’s antitrust regulator last year $.75 billion and $527 million, respectively.

Alibaba’s fine represented about 4% of its 2019 domestic sales, while Meituan’s represented 3% of its 2020 domestic sales.

Didi’s punishment could pave the way for Beijing to ease a restriction that bans it from adding new users to its platform and allow its apps to be restored on domestic app stores.

Didi, which was co-founded by former Alibaba employee Will Wei Cheng in 2012 and backed by SoftBank Group (9984.T) and Uber Technologies (UBER.N), had previously committed 10 billion yuan to a potential fine, Reuters previously reported.

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

Days after Didi’s IPO, China’s powerful internet watchdog, the Cyberspace Administration of China, launched a cybersecurity investigation into the company’s data practices and ordered app stores to remove 25 mobile apps powered by Didi.

The restrictions have weakened Didi’s dominance and allowed competing ride-hailing services operated by automakers Geely (GEELY.UL) and SAIC Motor (600104.SS) 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. Continue reading

Didi’s shares skyrocketed during its initial public offering (IPO), valuing the company at $80 billion. It was the largest US listing of a Chinese company since 2014.

In addition to Didi, the CAC also launched cybersecurity reviews of Full Truck Alliance (YMM.N) and online recruitment firm Kanzhun Ltd in July 2021.

Kanzhun and Full Truck Alliance said June 29 the regulator gave their apps the green light to resume new user registrations. Continue reading

($1 = 6.7405 Chinese Renminbi Yuan)

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Reporting by Julie Zhu and Xie Yu in Hong Kong; Yingzhi Yang in Beijing and Nivedita Balu in Bengaluru; Edited by Aditya Soni and Edmund Blair

Our standards: The Thomson Reuters Trust Principles.

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