China: VTC leader fined 1.2 billion euros

The “Chinese Uber” sentenced: the internet regulator on Thursday imposed a fine of around 1.2 billion euros on the local giant of the VTC, Didi, which it accuses in particular of offenses in terms of data security personal.

The company, leader in the reservation of cars with driver on the Chinese market, is thus undergoing the takeover by China of the tech sector, which began nearly two years ago.

The Chinese Cyberspace Administration (CAC) explains in its press release that it has “incontrovertible evidence” that Didi has repeatedly violated Chinese law, particularly in terms of internet security and the protection of personal data.

The amount of the fine, set at 8.03 billion yuan (nearly 1.2 billion euros), represents more than 4% of the company’s annual turnover in 2021.

In its press release, the regulator accuses Didi, for example, of having illegally stored the personal information of more than 57 million drivers in an insufficiently secure format.

The VTC company is also condemned for having analyzed the data of passengers without their knowledge, including photos present in their mobile phones.

“Despite the fact that the regulatory authorities have ordered rectifications (in the practices of Didi), no general and in-depth correction has been made,” laments the China Cyberspace Administration.

She claims the breaches of the law spanned a seven-year period from June 2015.

– The New York episode –

The digital giants have been under pressure since 2020 from the Chinese authorities, who are stepping up the blows against powerful internet companies for competition and personal data issues.

Didi, the “Chinese Uber”, fined around 1.2 billion euros in China for personal data security breaches (AFP/Archives – Jade GAO)

Chinese start-ups have long been encouraged to finance themselves through IPOs in the United States.

In 2014, e-commerce giant Alibaba raised $25 billion on Wall Street, making it the biggest IPO of all time.

But in a context of growing confrontation with the United States, particularly in the technological field, China is now encouraging its nuggets to seek financing on national stock exchanges (Hong Kong, Shanghai, Shenzhen or even Beijing).

Contrary to many of his compatriots, Didi had however maintained in June 2021 a fundraiser in New York.

An obstinacy which had caused the dissatisfaction of Beijing, which feared in particular a transfer of sensitive data to American soil.

In the process, the Chinese authorities had launched an administrative investigation against Didi in connection with his collection of personal data.

– Reconciliation? –

They had also banned the downloading of the VTC application in China – an unprecedented measure targeting a tech giant. People who already had it on their smartphone could, however, continue to use it.

The seat of Didi, the
The headquarters of Didi, the Chinese “Uber”, in Beijing, July 2, 2021 (AFP/Archives – Jade GAO)

Under pressure, Didi finally announced in December 2021 his hasty withdrawal from the New York Stock Exchange, after only five months of listing.

This regulatory fine announced Thursday against the VTC company is however seen as a positive signal for the tech giants, marking a sort of epilogue to the turn of the screw launched in 2020.

After nearly two years of regulatory tightening, Beijing had already affirmed its support for the digital economy in April, raising hopes of reconciliation with this sector.

Several bosses have also been received by the government in recent weeks, an initiative seen as a reassuring sign addressed to powerful companies in the internet sector.


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