China’s Tech Crackdown Targets Data After Didi Investigation

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

Brendan McDermid | Reuters

China’s tech giants have become some of the world’s most valuable companies largely unchecked by regulation, but that’s changing.

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

But in June, the Data Security Act was passed, which defines the rules for how companies collect, store, process and transfer data. It goes into effect in September.

A separate law called the Personal Information Protection Law is also in the works. If approved, it will give users more control over their data.

“We can definitely expect to see a lot of crackdown on user data as soon as those two laws are passed,” Schaefer said. “This is definitely another (regulatory) front.”

The probes at Didi, Full Truck Alliance and Boss Zhipin are not governed by these new laws, but by existing regulations. While the cases may seem sudden, regulators have reached out to various tech companies about a number of issues, including data regulation and anti-competitive practices.

In April, the China State Administration for Market Regulation (SAMR) summoned 34 companies, including Tencent and ByteDance, and told them to conduct self-inspections to comply with antitrust rules.

“It started in April and they (the Chinese government) have given companies more than 100 items of compliance requirements that cover many aspects, antitrust, data, advertising, pricing and many things,” said a lawyer who works with law firms. Chinese technology in compliance. he told CNBC.

“They (the government) have given (companies) so many instructions and leads asking them to improve their compliance system in all of those aspects,” said the lawyer, who wished to remain anonymous due to the permanent and sensitive nature of the compliance work.

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