China cracks down on tech firms over their collection and use of personal data

Chinese regulators have launched a cybersecurity probe into three more US-listed tech companies, following last week’s order to remove the ride-hailing Didi app from China’s app stores, over data security risks.

The Cyberspace Administration of China (CAC) on Monday opened a cybersecurity review into Yunmanman and Huochebang, both subsidiaries of the New York-listed Full Truck Alliance, and Boss Zhipin, an online recruitment platform listed on the Nasdaq.

CAC said the investigation had been launched to “prevent national data security risks.” Throughout the cybersecurity check, all three companies are prohibited to register new users.

The crackdown on tech firms comes after Chinese regulators blocked Didi, the country's biggest ride-hailing platform, from being downloaded, mere days after its initial public offering in the US. China’s Uber-like platform gathers massive amounts of real-time data, using some of it for autonomous driving technologies and traffic analysis.

“After checks and verification, the Didi Chuxing app was found to be in serious violation of regulations in its collection and use of personal information,” CAC claimed, demanding that the company fix its security issues. The crackdown does not affect existing Didi users, but will prevent new users from registry on the platform in the meantime.

“The company will strive to rectify any problems, improve its risk prevention awareness and technological capabilities, protect users' privacy and data security, and continue to provide secure and convenient services to its users,” Didi said in a statement on Sunday.

Last Thursday, Didi Global ended its first day on the New York Stock Exchange with a valuation of $68.49 billion, rising to nearly $74.5 billion when the markets closed on Friday. Didi made the biggest listing by a Chinese company in the US since Alibaba's breakthrough back in 2014. It also raised $4.4 billion in the Initial Public Offering (IPO).

The Chinese government has been focusing more closely on cybersecurity lately, in an effort to regulate a technology sector it had overlooked for years. Last month, China passed a new Data Security Law that stipulates how companies should collect, store and use data.

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