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China Suspends DiDi App Operations over Alleged Data Violations

China has suspended all app operations of DiDi (NYSE: DIDI) as the news of the app acting maliciously in terms of data archives where the app has been found illegally collecting personal user data. The Cyberspace Administration of China had previously issued a warning to the app concerning data compliance issues which ultimately resulted in China banning the app operations citing security abidance issues.

DiDi had earlier started their trading with New York Stock Exchange and had managed to raise funds amounting to $ 4.4 billion in a public offering before the news of its illegal data collection went online.

DiDi App in Process to Halt All Their Operations in China

Following the news of an inevitable ban from China, DiDi has responded that the company will follow the order directed by the authorities and will halt all their app activities in the region. The app will not accept any new user registrations and will also remove their application from the Chinese app market. They further clarified that they will do their best to comply with the norms and guidelines issued by the CAC.

Following the usual course, China had been banning several other companies and organizations citing reasons such as data violations and security concerns where DiDi seems to be the newest addition.

It’s quite rare for an app of this magnitude and usage capacity to be taken down by the authorities. The app reports have revealed that the application has been successfully serving 41 million user transactions with a potential service mark rising up to 493 million users on an annual basis.

CAC Announces an Investigation

The CAC later in their proceedings have prompted a series of investigations on DiDi’s data violation and have ordered authorized personnel to ban the application. The order had made the share price of DiDi suffer major harm and its prices registered a fall of 5.3%. DiDi had also listed itself on an IPO where the company was valued at US$ 67.5 billion.

DiDi offers services in China and needs to work with real-time data collection to display credible results. The app uses this data collected to show driving technology and traffic analysis. The app services had somehow flagged the CAC which further had to suspend DiDi citing data violation and security issues. The authorities have not made any statements on the type of data violations that DiDi is responsible for.

DiDi had updated its app with new user guidelines before it debuted with the New York Stock Exchange. The app clarified the update stating that they have added additional services in the application.

The news of this data violation is not new for DiDi as the app has been under the radar of the Chinese Government before as well for reasons such as security concerns and regulatory probes in the country over its operating license.

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China Suspends DiDi App Operations over Alleged Data Violations