15/08/2022

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Claiming breaches of information, China fines Didi greater than $1.2 billion

BEIJING, China: Chinese authorities are set to fine ride-hailing firm Didi Global more than $1 billion, which could end a state probe into the firm’s cybersecurity practices.

The fine would be more than $1.28 billion, accounting for about 4.7 percent of Didi’s $27.3 billion total revenue last year, according to sources.

The Wall Street Journal first reported the potential size of the fine earlier this week.

Since the Alibaba Group and Meituan were fined $2.75 billion and $527 million last year, Didi’s fine would be the largest regulatory penalty imposed on a local tech company by China’s antitrust regulator.

The government in Beijing could ease restrictions banning Didi from adding new users and allow its apps to be restored on domestic app stores after the penalty is imposed.

Reuters previously reported that Didi set aside 10 billion yuan for a potential fine.

The company, co-founded in 2012 by former Alibaba employee Will Wei Cheng and backed by SoftBank Group and Uber Technologies, angered Chinese regulators by being listed for $4.4 billion in New York in June 2021, despite being asked by Chinese authorities to put the move on hold.

Days after it went public, the Cyberspace Administration of China (CAC) launched a cybersecurity probe into the company’s data practices and ordered app stores to remove 25 of its mobile apps.

In December, the company announced plans to delist from the New York Stock Exchange, which was approved by its shareholders in May.

Besides Didi, the CAC also launched cybersecurity reviews of Full Truck Alliance and online recruitment firm Kanzhun in July 2021.

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