In a surprising move, the Chinese Cyberspace Administration ordered the online mobile app stores in the country to take ride-hailing app Didi Chuxing off their shelves due to “serious violations of law and regulation” in the collection and use of personal information.
Didi Chuxing is a top Chinese ride-hailing app in the country. According to the Chinese watchdog, the application severely violated relevant laws and regulations while collecting and abusing user data, Global Times reported.
The regulator has also told the ride-hailing company to take concrete measures to fix the loopholes in accordance with the law and national standards to ensure the safety of user information. China's internet watchdog has started an investigation into Didi Chuxing, for issues related to national data security.
This comes two days after the company made its debut on the New York Stock Exchange (NYSE), NHK World reported. According to NYSE, Didi's IPO was the bourse's second-biggest of the year.
As things stand, the Chinese regulator has banned the application from accepting new users while the investigation takes place. Experts believe that the review is another example of Beijing crackdown on influential IT giants.
Earlier this April, the Chinese government imposed a huge fine on Chinese e-commerce giant Alibaba Group. Claiming a crackdown on anti-competitive practices among Chinese internet giants, Beijing has ramped up a broader effort to clean up the operations of the country's fast-growing and freewheeling tech sector.
On a regular basis, Chinese regulators have been calling out tech companies for alleged offences, including inconsistent pricing, user privacy concerns and difficult working conditions, reported The Wall Street Journal (WSJ).
Beijing has been infamous for using anti-monopoly rules to curb the market influence of foreign firms. Chinese regulators have also called on the nation's citizens to help supervise the behaviour of tech companies. Tech companies have responded with pledges to be good corporate citizens.