Chinese Ministry of Commerce Industry and Information Technology announced a six-month campaign on Monday to regulate Internet companies, especially behaviors that “disrupt market order, harm consumer rights, or threaten data security.” Prior to this, technology giants such as Alibaba, Baidu and Tencent were repeatedly fined for violating antitrust laws and introduced a new plan to restrict overseas listings of Chinese companies.
The suppression has expanded to the success that was once regarded as a local champion. The taxi-hailing company Didi Chuxing defeated Uber in China and entered Latin America and Africa. On June 30, the company raised US$4.4 billion in an IPO on the New York Stock Exchange, which is the largest Chinese company since Alibaba in 2014.
Two days later, the Chinese authorities launched an investigation into the company. Didi delisted Didi from the Chinese app store on the grounds that the collection and use of personal information seriously violated laws and regulations and prohibited the registration of new users. According to Bloomberg News, penalties range from fines to forced delisting. Soon after, another agency imposed antitrust fines on Didi and other technology companies for mergers and acquisitions over the past decade.
According to reports, Didi was warned by Chinese regulators to postpone the IPO, but chose to continue listing.Other Chinese giants seem to have gotten the memo: Bytedance, owning Tik TokAccording to reports, the company has been considering overseas IPOs and shelved these plans after meeting with regulators. The source told Wall Street Journal. On Tuesday, Tencent Tell Reuters It temporarily suspended the New China registration on the ubiquitous WeChat app, “in order to comply with all relevant laws and regulations.”
The reason for this seemingly sudden crackdown is unclear, but it comes at a time when Chinese President Xi Jinping is exercising more power over all aspects of life. Observers say that under the authorization of a series of new legislation, the government hopes to regain control of technology companies that have become too large, too powerful, and too willing to abuse their market share. At the same time, Xi Jinping seems to be re-adjusting the country’s science and technology industry to support state-led development in areas he cares about, such as creating breakthrough technologies. artificial intelligenceThere is growing concern that in an increasingly hostile international environment, exposure to foreign markets and foreign regulatory agencies is too risky.
“Xi Jinping always worries about political loyalty: loyalty to him, to the Communist Party, and to the ideology of the party,” said Susan Shirk, chairman of the 21st Century China Center at the University of California, San Diego. She said that Xi Jinping could not determine the loyalty of Chinese private technology giants. They have become wealthy and famous, and sit on large amounts of data. “It made him very nervous because he didn’t know what they would do with all these resources. At some point, they might be able to use them to organize and challenge Xi Jinping and even the party’s rule.”
Didi’s initial public offering on June 30, the day before the 100th anniversary of the founding of the Communist Party, some people think that the timing and the US listing are unpatriotic. July 5 State-run editorial Global Times Didi said it owns 80% of China’s online car-hailing market and has sensitive information about personal travel and habits. It stated that the government would not allow Internet giants to “become the rule-makers for data collection and use,” adding that “standards must be in the hands of the government.” Rumors spread On Chinese social media, Didi handed over user data to US regulators. The complaints of online nationalists were loud enough that the company posted a denial on its official Weibo account.
After the IPO, a 2015 report from the company’s research department was recirculated on the Internet.Paper details Entry and exit of government employees, Including which institutions have the longest working hours, based on their large amount of user data. This visibility-coupled with Didi’s very detailed maps-can make the authorities nervous.
“Obviously, from a national security point of view, the data held by Didi is considered sensitive,” said Sam Sachs, a senior researcher at the Paul Tsai China Center at Yale Law School.Didi has also been Handle murder investigation, Failed to protect user data and used the collected personal information to charge passengers different prices.