Chinese regulators, including the Cyberspace Administration of China, mandated that app stores in the country delete 25 apps relating to ride-hail platform Didi, including its financial services application and its carpool app, the Wall Street Journal reported on Friday (July 9).
Regulators indicated the removal is due to Didi’s illegal collection of users’ personal information. Chinese officials also expressed concern that the data collected by Didi could end up being accessed by foreigners because of public disclosure laws required for public listings in the U.S., according to a WSJ report on Tuesday (July 6).
Didi went public in the U.S. at the end of last month with a $4.4 billion initial public offering (IPO) and started trading on the New York Stock Exchange. It is the second-largest amount raised by a Chinese company going public in the U.S. after Alibaba’s 2014 listing, the WSJ reported on Monday (July 5).
Didi was asked by China some three months ago to suspend its U.S. IPO; instead, the platform decided to move forward because regulators didn’t force it to halt the filing, Bloomberg reported.
“This is the first high-profile use of China’s cybersecurity review mechanism. It also raises questions about the firm’s personal data collection practice,” Xiaomeng Lu, senior analyst, geo-technology for the Eurasia Group, told Bloomberg. “But more importantly, the timing of the action right after Didi’s record IPO suggests that Beijing is uncomfortable with large tech companies’ New York listings during a time of escalating tech tension between the two countries.”
On Wednesday (July 7), Chinese officials mandated that Tencent’s WeChat Pay and Ant Group’s Alipay drop Didi from their platforms. Although neither company is an app store, Didi’s app was integrated with both platforms.
A deep-dive review by PYMNTS of Didi’s F-1 filing with the Security and Exchange Commission (SEC) revealed that the company outlined the revenue opportunity to investors as one that would add to the “already massive mobility market opportunity.”
Didi pointed to data that showed active users topping 493 million and 42 million average daily transactions for the 12 months ending in March of this year. It also indicated that the ride-hailing company had 15 million drivers.
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