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China’s top cybersecurity regulator fined ride-hailing giant Didi Global 8.026 billion yuan ($1.19 billion ) for breaching Chinese laws and regulations, concluding a probe that forced Didi to delist from New York within a year of its debut.
The fine marks the largest regulatory penalty imposed on a Chinese mainland-based tech company since e-commerce titan Alibaba Group and food delivery giant Meituan were fined $2.75 billion and $527 million respectively last year by China’s antitrust regulator.
The Cyberspace Administration of China (GAC) said in a statement on Thursday that Didi had violated three major laws concerning cybersecurity, data security and personal information protection, a regime that the country revised and expanded last year as part of efforts to regulate its cyberspace and require companies to improve their handling of data.
Didi was found of illegal collection of 11.963 million screenshot grabs from its users’ mobile phone albums, as well as excessive collection of user clipboard information and 8.323 billion pieces of application list information, the regulator said.
Didi also over-collected 107 million instances of passengers’ facial recognition information, and analyzed 53.976 billion sets of passenger travel intention information without informing the passengers in advance, it said.
Didi’s illegal operations have brought about serious security risks which could compromise the country’s key information infrastructure and crucial data security, the CAC noted.
In an unusual move, the regulator said that Didi’s founder and Chief Executive Cheng Wei and President Jean Liu were responsible for the violations and imposed penalties of 1 million yuan each.
Under China’s Personal Information Protection Law, companies can be fined up to 5% of their past year’s turnover or 50 million yuan, while the maximum fine for individuals seen to be responsible for the violations is 1 million yuan.
Didi said after the announcement that it accepted the CAC’s decision and would conduct comprehensive self-examination and rectification.
The penalty on Didi was part of a wider and unprecedented crackdown by authorities on violation of antitrust and data security rules, among other issues, targeting some of China’s best-known corporate names.
The fine on Didi could pave the way for the regulator to ease a restriction banning the company from adding new users to its platform and allow its apps to be restored on domestic app stores.
The CAC announced its inquiry into Didi shortly after its New York debut on June 30, 2021. It also ordered app stores to remove 25 apps operated by Didi and told the company to stop registering new users, citing national security and public interest.
Didi, which delisted from New York last month, previously aimed to list in Hong Kong by June. It reportedly put such plans on hold indefinitely after failing to win approval from Chinese regulators.
On July 16, Didi Chuxing found itself in the news headlines after its subsidiary Didi Pay, a business unit focused mainly on providing digital payment service for Didi Chuxing’s ride-hailing business, received a warning from the People’s Bank of China, the country’s central bank, and it was fined 4.27 million yuan ($632,000) for violations.
Authorities have in recent months changed their tone towards the crackdown as they seek to boost an economy hurt by COVID-19 containment measures. The shift has raised hope for companies and investors that the worst is over, though jitters remain.