China removes Didi from its app stores.
The regulatory body points out that the application, which began trading on the New York Stock Exchange days ago, would have illegally collected personal data from users.
Didi confirmed in a statement the withdrawal of its app from app stores in China. Unfortunately, the Cyberspace Administration of China ( CAC ) regulatory body has made this decision that could hurt the company's revenue.
According to CAC, Didi illegally collected personal data from users. Now, the platform that has a similar operation to Uber and is very popular in China will have to make changes to comply with data protection regulations. This news comes days after the app began trading on the New York Stock Exchange, with a valuation of $ 74.5 billion.
"The company expects that the withdrawal of the application may hurt its revenue in China," Didi said today in a statement. However, it did not specify the potential scope of its withdrawal from China. Analysts have said they don't expect a significant impact on earnings as the app's user base in China is enormous. App retirement does not affect existing users.
The app also indicated that they were not aware of the investigation announced by the CAC on July 2, which caused their shares to fall by up to 10% before their IPO. Two days later, the CAC ordered the removal of Didi's app from China's app stores, alleging that the company had illegally collected personal data from users.
Prior to the IPO, Didi was unaware of the CAC's decision to review cybersecurity and suspension of new user registration in China and to remove the Didi Choking app from app stores in China, respectively, on July 2. And announced July 4, 2021. He told the app in a statement sent to Reuters.
Ryan Fedasiuk, a research analyst at the Georgetown Center for Security and Emerging Technologies, said the (Chinese Communist Party) had already targeted the brick group, which was planning an IPO, and was forced to cancel it. Has been. He added that the CAC initiated the review and suspended Didi's presence on Chinese app stores just days after the public abortion.
On Monday, Didi said the order to withdraw its app from stores in China could hurt revenue. China's State Administration is also investigating the app for Market Regulation (SAMR) to determine whether it used anti-competitive practices to unfairly drive out smaller rivals.
A few days ago, the app's vice president, Li Min, denied rumors on social media that the app protects user data in the United States.
He said: "Like many other overseas-listed Chinese companies, Didi stores all data of domestic users on servers in China. It is impossible to pass the data to the United States".
But the CAC pointed out that the app has the problem of "collecting personal information in violation of the relevant laws and regulations of the Democratic Republic of China." As it is withdrawn from stores, the application will not be downloaded again in China until further notice. However, it can continue to be used in other markets where it operates.
The company will continue to address any concerns, improve risk prevention and awareness of its technical capabilities, protect the privacy and security of user data and provide secure and convenient services to its customers," Didi wrote in your release.