China Cracks Down On Its Tech Giants. Sound Familiar?
China’s Ministry of Industry and Information Technology announced a six-month campaign on Monday to regulate internet companies, particularly practices that “disrupt market order, damage consumer rights, or threaten data security.” That followed repeated fines against tech giants including Alibaba, Baidu, and Tencent for violating antitrust laws, and a new plan to restrict overseas listings by Chinese companies.
The crackdown has extended to successes once viewed as home-grown champions. Ride-hail company Didi Chuxing beat out Uber in China and made inroads in Latin America and Africa. On June 30, the company raised $4.4 billion in an IPO on the New York Stock Exchange—the largest for a Chinese company since Alibaba in 2014.
Two days later, Chinese authorities launched an investigation into the company. Citing “serious violations of laws and regulations in collecting and using personal information,” Didi was pulled from Chinese app stores and barred from registering new users. According to Bloomberg, the penalties could range from fines to a forced delisting. Soon after, another agency levied antimonopoly fines against Didi and other tech companies over mergers and acquisitions over the past decade.
