Over the weekend, China announced it was starting a cybersecurity review of Didi and ordered app stores to remove the ride-hailing company’s services from their platforms, dealing a major blow to the newly listed firm and its investors. The internet regulator on Monday announced it was also beginning probes into platforms run by Full Truck Alliance Co. and Kanzhun Ltd., two other firms that listed in the U.S. in recent weeks.
As part of the cybersecurity reviews, the regulator ordered Didi, Full Truck Alliance’s Huochebang and Yunmanman services, as well as Kanzhun’s Boss Zhipin to halt new registrations. The probe is part of a wider crackdown on China’s largest internet corporations, as the government seeks to tighten the ownership and handling of troves of information they gather daily from hundreds of millions of users.
“We must never let any internet giant control a super database that has more detailed personal information than the state, let alone giving it the right to use the data at will,” the Global Times said in the commentary.
While it’s not clear how Didi illegally collected personal data, companies should gather the least amount of information required for their services, the newspaper added.
SoftBank Group Corp. owned roughly 20% of the firm following the listing, while Uber Technologies Inc. owned about 12%, according to an earlier Didi filing. Founder Cheng Wei owns about 6.5%, just ahead of the 6.4% held by Tencent Holdings Ltd. SoftBank sank as much as 6.1% in Tokyo trading Monday, while Tencent slipped as much as 2.1%. Didi fell more than 5% on Friday following the announcement of its probe.
The probe into the three recent U.S. debuts comes after a boom in Chinese firms seeking overseas IPOs. Full Truck Alliance, also backed by Tencent, is little changed since its June 21 listing, while Kanzhun has nearly doubled. Other firms that listed in the U.S. last month include grocery services MissFresh Ltd. and DingDong Cayman Ltd.