Chinese regulator targets US-listed tech firms

Beijing: A day after Chinese Cybersecurity Review Office ordered app stores to remove ride-hailing app Didi Chuxing, the regulator announced on Monday that it will investigate job recruiting platform Boss Zhipin, and two commercial freight platforms, over national security concerns.

A notice by the Chinese regulator said that cybersecurity reviews will be conducted against Boss Zhipin and truck-booking platforms Yunmanman and Huochebang under Full Truck Alliance, to address national data security risks, maintain national security, and protect public interests, Global Times reported.

New user registration on the three platforms has been blocked during the review, the regulator said. Kanzhun, the owner of Boss Zhipin, was listed in US’s NASDAQ on June 11. Full Truck Alliance, the Chinese service that connects freight shippers and truck drivers conducted an IPO in the US on June 22.

“These companies are now listed in the US. In this process, some important data and personal information held by the companies may be leaked due to US regulation. In other words, the listing in the US could lead to data’s outbound security risks,” Zuo Xiaodong, vice-president of the China Information Security Research Institute, told the GT on Monday.

On Sunday, the Chinese Cyberspace Administration ordered online mobile app stores to take ride-hailing app Didi Chuxing off their shelves due to “serious violations of law and regulation” in the collection and use of personal information.

The Chinese watchdog said the application severely violated relevant laws and regulations while collecting and abusing user data. The regulator told the ride-hailing company to take concrete measures to fix the loopholes in accordance with the law and national standards.

Last week, China’s internet watchdog started an investigation into the Didi Chuxing, for issues related to national data security. This development came just two days after the company made its debut on the New York Stock Exchange (NYSE), NHK World reported.

Liu Dingding, a Beijing-based independent tech analyst said that given the current situation, more Chinese firms that intend to list in the US, would have a second thought amid the country’s tightening security on data protection.

Other experts believe that the review is another example of Beijing’s crackdown on influential IT giants. Earlier this April, the Chinese government imposed a huge fine on Chinese e-commerce giant Alibaba Group.

Claiming a crackdown on anti-competitive practices among Chinese internet giants, Beijing has ramped up a broader effort to clean up the operations of the country’s fast-growing and freewheeling tech sector.

Chinese regulators have been calling out tech companies for alleged offences, including inconsistent pricing, user privacy concerns and difficult working conditions, reported The Wall Street Journal (WSJ).

Beijing has been infamous for using antimonopoly rules to curb the market influence of foreign firms. Chinese regulators have also called on the nation’s citizens to help supervise the behaviour of tech companies. Tech companies have responded with pledges to be good corporate citizens.