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  • By The Financial District

China Fines Didi $12-B For 'Mishandling' Data

In slapping China’s ride-hailing giant, Didi Global, with a record $1.2 billion fine for data breaches, Beijing made clear to the country’s internet giants that their freewheeling days were over, Paul Mozur and John Liu reported for The New York Times early on July 22, 2022.


Photo Insert: The punishment issued by China's internet regulator on Didi, one of the country's most valued digital companies, was the third big attempt by the government to reign in the country's high-flying internet sector.



The punishment issued by China's internet regulator on Didi, one of the country's most valued digital companies, was the third big attempt by the government to reign in the country's high-flying internet sector.


As China's leader, Xi Jinping, has conducted a broad drive to enhance state control over the economy, regulators have focused on internet companies such as Didi, which operates services comparable to Uber, that have gained broad, and some say disproportionate, influence over Chinese society.



"I think the Cyberspace Administration of China (CAC) wants to use this case to set a chilling precedent for other Chinese tech firms," Angela Zhang, a law professor at the University of Hong Kong who specializes in China's regulatory governance, told Reuters.


The punishment, released by CAC on Thursday, was the biggest fine issued in China for data protection violations. Authorities also singled out two of Didi's founders for blame, invoking national security as they accused Didi of a slew of crimes, including the unencrypted storage of 57 million driver identity numbers.


All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

The announcement brought to a close a year-long probe that had jeopardized Didi's blockbuster IPO in the United States and eventually caused the company to delist from the New York Stock Exchange.


Thursday's action appeared to ease the road for Didi to list its shares in Hong Kong, implying that a frenzy of rule-making and tough regulatory enforcement may be coming to an end.


Business: Business men in suite and tie in a work meeting in the office located in the financial district.

Beijing is under pressure to revitalize the country's sluggish economy ahead of a crucial leadership conference this year, at which Mr. Xi is anticipated to seek a third term as president. Many people celebrated when China's leader, Li Keqiang, expressed support for the digital economy in May.


By concluding the Didi inquiry, Beijing may be sending a further signal to soothe investors and restore trust in the economy.



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