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China orders DiDi to be removed from app stores and downloads suspended for alleged data misuse

The China Cyberspace Administration (CAC) order comes just days after DiDi went public on the New York Stock Exchange.

This article was translated from our Spanish edition. Opinions expressed by Entrepreneur contributors are their own.

Last Wednesday, July 1, the private transport platform DiDi debuted on Wall Street, raising $ 4.4 billion in the first hours. But not everything looks good, since the China Cyberspace Administration (CAC) ordered the removal of DiDi from all app stores and suspend downloads , since the company is under investigation for allegedly illegally collecting personal data of its users and making use undue of these.

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On Friday, the Chinese regulator announced that they have launched an investigation into DiDi to protect "national security and the public interest ." Two days later they announced that DiDi Global Inc. was asked to make changes to comply with the country's data protection rules. However, the government body did not specify the nature of the DiDi violations in a statement on its social networks.

For its part, DiDi confirmed in a statement cited by Reuters that it stopped registering new users and would remove its application from the app stores . The company also said they would work on the requested changes to protect user rights. For now, the platform continues to work for those who have already downloaded it

What draws the attention of specialists is that the investigation and the suspension were announced just four days after DiDi went public on the New York Stock Exchange , with an Initial Public Offering that valued the company at 67.5 billion euros. dollars and a price of 14 dollars per share.

In filings prior to listing on Wall Street, the company stated that: "We follow strict procedures in the collection, transmission, storage and use of user data in accordance with our data privacy and security policies."

One day before its trading debut, on June 29, Didi's China app updated its user information and data privacy policy. The platform described the move as a "regular update" after adding two new in-app services under its chauffeur business, according to a statement quoted by Reuters.

The announcement of the investigation caused a drop of 8% in the price of DiDi shares , which hit a high of $ 16.88 per share on Thursday and closed at $ 15.53 on Friday, according to data from Yahoo Finance .

It should be remembered that the Chinese government has been taking drastic measures against the country's technology giants for months for antitrust and cybersecurity issues. The best-known example of this hunt is Alibaba , which has faced a series of fines, penalties and investigations , while its founder, the charismatic Jack Ma , has hardly appeared in public since last October, except to participate in a virtual event .

Founded by Will Cheng in 2012, DiDi operates in more than 15 countries and each day offers more than 20 million trips in China alone.