Laking gig laws and regulations

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China's tech crackdown has a new battleground — data

PUBLISHED MON, JUL 5 2021 2:43 AM EDT

Arjun Kharpal

@ARJUNKHARPAL

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KEY POINTS

Chinese regulators ordered app stores in the country to remove ride-hailing service Didi on Sunday, alleging the company had engaged in the illegal collection and use of personal data.
Authorities are turning their heads toward data regulation because of its importance to the technology industry, a key driver of economic growth.
China passed a major data security law in June and is working on further regulation around individual data protection.

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DIDI

RT: DiDi IPO: China's Didi Global Inc. debuts on New York Stock Exchange

Traders work during the IPO for Chinese ride-hailing company Didi Global Inc on the New York Stock Exchange (NYSE) floor in New York City, U.S., June 30, 2021.

Brendan McDermid | Reuters

GUANGZHOU, China — China's government has opened a new battlefront with the country's technology giants, looking to target their collection and use of data.

On Monday, the Cyberspace Administration of China (CAC) also opened a cybersecurity probe into U.S.-listed Boss Zhipin and subsidiaries of Full Truck Alliance.

It came a day after the CAC ordered app stores in the country to remove ride-hailing service Didi, alleging the company had engaged in the illegal collection and use of personal data. On Friday, the same regulator announced a cybersecurity review into Didi, which just last week carried out a massive initial public offering in the U.S.

The CAC reports to a body that is chaired by Chinese President Xi Jinping.

Beijing has been cracking down on domestic technology giants over the last few months, from the cancellation of Ant Group's $34.5 billon listing to Alibaba's $2.8 billion antitrust fine. The focus has very much been on anti-monopoly as well as financial technology regulation.

Now regulators are turning their heads toward data because of its importance to the tech industry, a key driver of economic growth.

"You can't have a digital economy without strong data privacy protection. And the digital economy is propping up China's slowing growth," Kendra Schaefer, a partner at consultancy Trivium China, said.

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China's technology giants have grown into some of the world's most valuable companies largely unchecked by regulation — but that's changing.

Since the 2017 Cybersecurity Law, China has had some regulation around data.

But in June, the Data Security Law was passed which defines the rules around how companies collect, store, process and transfer data. It comes into force in September.

A separate piece of legislation called the Personal Information Protection Law is also being worked on. If passed, it will give users more control over their data.

"We can definitely expect to see a lot of user data crackdowns as soon as those two laws are passed," Schaefer said. "This is definitely another front (of regulation)."

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