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China to launch probe into 3 firms, a day after Didi suspended

China really seems to be taking the illegal collection of its citizen’s data by tech companies quite seriously, as it has announced that a full-fledged investigation will be launched into three more applications that are controlled by US-listed companies, barely a day after it first came down on Didi Global, banning smartphone makers in the country from incorporating its app in their models. The news that China will launch a probe into 3 firms was first announced by the Cyberspace Administration of the country through a statement on Thursday.

Kanzhun and Full Truck Alliance Under Scrutiny

The regulatory agency said that an investigation has been opened into the functioning of Boss Zhipin, which is run by Kanzhun as an online recruitment platform.The company recently raised a sum of $912 million in an initial public offering.

Other targets include Huochebang and Yunmanman, two truck hailing services which joined hands in 2017 to create Full Truck Alliance, in 2017. This company, which is often called the “Uber for trucks” in China, raised a sum of $1.6 billion on June 22, through the New York Stock Exchange.

China to launch probe into 3 firms

Image Credits: LinkedIn

But that’s not the reason why these three businesses have become the target of the Cyberspace Administration. The real issue why China will launch a probe into these three is in order to “prevent risks regarding national data security, maintain national security, ans safeguard public interest.” New user registrations have been suspended by the three platforms, on directions from the authority.

Full Truck Alliance will whole-heartedly cooperate with the investigation, but Kanzhun did not respond immediately.

What Happened to Didi?

Didi Global

Image Credits: Didi Global

This announcement comes barely one day after the country suspended the Didi Global app on its grounds, after the company was found to be collecting information from its users illegally. Smartphone manufacturers across China have been directed to drop the app from their app stores, and Didi itself has been asked to make appropriate changes to its policy, so as to comply with the Chinese data protection guidelines.

In response, Didi Global has said that as of now, all new user registrations have been suspended. However, the people who have already been using the application after downloading it, will not face any troubles, and will be able to continue using the app.

It may be worth noting that Didi too, has very recently made its IPO debut through the New York Stock Exchange, raising a sum of around $4.4 billion.

This leaves room for wondering if there is a link between IPO and national security risk, as all three companies that China will launch a probe into, had recently entered the stock market as well.


Source: Forbes



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