The Chinese driver service broker Didi Chuxing was targeted by Chinese regulators shortly after its IPO in New York. The Beijing cyberspace supervisory authority ordered the deletion of the Didi app from Chinese app stores on Sunday. During an investigation, “serious violations” were found in the collection and use of personal data by Didi, it said. The company must first solve the problems.
Didi announced that it had already stopped registering new users on July 3rd and is now working on correcting its app in accordance with regulatory requirements. Users who have already installed the app can continue to use it normally. They will cooperate fullysaid the Uber rival on China’s social network Weibo.
The Beijing-based company, which was founded in 2012, claims to have 377 million active users, as officially announced numbers registered with the US Financial Regulator emerges. Didi went public in New York at the end of June, although the driver service broker had to cope with a significant drop in sales due to the pandemic in 2020. Before that, Didi grew vigorously, but was in the red until the first quarter of 2021 when there was a profit of $ 837 million.
New Didi share gives way
Didi shares had already fallen by more than five percent on Friday after the Cyberspace Administration of China (CAC) one Company investigation announced would have. When Didi’s stock market debut at the end of June, Didi’s shares had risen significantly, bringing the company to a market value of around $ 80 billion at times. For comparison: The US rival Uber, which operates in around 70 countries around the world, currently has a market capitalization of almost $ 95 billion.
The regulatory authorities in Beijing recently targeted a number of Chinese Internet companies and announced stricter rules for them. In April, China’s competition watchdogs imposed a record fine of 18 billion yuan (equivalent to 2.3 billion euros) on the Chinese Internet giant Alibaba for violating competition law. Last year, Alibaba had to cancel the IPO of its financial subsidiary Ant Group at short notice by order of the authorities.