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Chinese Ministry Industry and Information Technology announced a six-month campaign on Monday to regulate Internet companies, particularly practices that “disrupt market order, harm consumer rights or threaten data security”. After that, they repeatedly imposed fines on technology giants such as Alibaba, Baidu and Tencent for violating antitrust laws, and a new plan to limit lists of Chinese companies abroad.
The repression has spread to the successes seen as home champions. The Didi Chuxing Ride-hail company won Uber in China and has come a long way in Latin America and Africa. On June 30, the company raised $ 4.4 billion on the New York Stock Exchange, the largest in 2014 from Alibaba to the Chinese company.
Two days later, Chinese authorities launched an investigation into the company. Citing serious violations of laws and regulations when collecting and using personal information, Didi was banned from leaving Chinese app stores and registering new users. According to Bloomberg, penalties can include fines and forced dismissals. Shortly afterwards, another agency imposed antitrust fines on Didi and other technology companies for mergers and acquisitions over the past decade.
It has been reported that Chinese regulators warned Didi to delay his IPO, but chose to continue with the list. It seems that other Chinese giants got the release: ByteDance, the owner TikTok, which was allegedly investigating an IPO conducted abroad, suspended those plans after meetings with regulators, sources have told The Wall Street Journal. Tuesday, Tencent he told Reuters it temporarily suspended new Chinese records in the ubiquitous WeChat app to “comply with all applicable laws and regulations”.
Apparently the reasons for the sudden repression are not clear, but it comes amid moves by President Xi Jinping to demand more power over all aspects of life. Observers say the government, through new legislation, wants to regain control of technology companies that are willing to use too much power, too much power and too much market share. At the same time, Xi’s technology sector seems to be readjusting in areas responsible for state-led development, such as advanced technologies. Artificial intelligence. There is growing fear that exposure to foreign markets and foreign regulators is too dangerous in an increasingly hostile international environment.
“Xi Jinping is always concerned with political loyalty: with him, with the Communist Party, with the ideology of the party,” says Susan Shirk at UC San Diego XXI. President of the Center of China of the Century. According to him, Xi cannot be sure of the loyalty of China’s private technology titans, which have become rich and famous, and which sit in big data stores. “It makes them very nervous because they don’t know what they are going to do with all these resources. And maybe someday they can use it to organize a challenge for Xi Jinping or even organize the party’s authority.”
Didi’s June 30 IPO, a day before the Communist Party’s 100th anniversary, suggested that time and U.S. lists were not patriotic. A July 5th editorial in the state Global Times said Didi, who owns 80 percent of the travel market in China, has sensitive information about travelers and customs. The government will not allow Internet giants to “create rules for data collection and use,” adding that “the rules must be in the hands of the government”. Rumors spread On Chinese social networks, Didi has made user data available to U.S. regulators. As the murmurs made by the patriots of the line were loud enough, the company rejected its official Weibo account.
Following the IPO, the company’s 2015 research arm report was recycled on the Internet. As specified on paper the movements of government workers, including which agencies worked the longest hours, according to user data. This visibility — combined with Didi’s specific maps — can make the authorities nervous.
“Clearly, the data that Didi stores is sensitive from a national security perspective,” says Samm Sacks at Yale Law School’s Paul Tsai China Center. Didi has also been criticized in the past for how it happened he handled murder investigations, for charging users different data for protecting data and using the personal information collected.
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