China fines Didi $1.2 billion as tech sector pressure lingers

For Didi, once hailed as an innovator and revolutionary in China’s sedate transport sector, this has been a quick fall. The company was considered the pride of China’s bold and valuable startup in 2016, when it beat out its US rival Uber to buy the firm’s Chinese operations. At the time, its executives promised that the collected data would be used to eliminate congestion and eventually develop self-driving cars.

As Beijing has established more control over internet firms such as Didi, it has sought to shape the private sector more in line with the Communist Party’s emphasis on political security and achieving its political goals. Popular attitudes towards the Chinese tech sector, once an emblem of future achievement, seem to have changed as well.

Following the announcement of the punishment, a number of professors and tech commentators took to Weibo to call for even harsher punishments.

Jin Kanrong, a professor of international relations at Renmin University, called the revelations of Didi’s violations “really shocking!” Didi “disregarded national security, disregarded national laws, and disregarded the privacy of citizens,” he added. Others have gone even further, wondering if a company that jeopardizes national security should even be allowed to exist.

In the short term, the government is likely to give in to Didi by allowing its apps to be reinstated in stores. But the company will still have to demonstrate that it has addressed regulator concerns over data security and other issues, said Linghao Bao, an analyst at Trivium China, a China-focused policy research group.

“Big tech platforms are getting a break as the economy is not in the best shape. Regulators are moving away from campaign-style repression to more rule-based governance,” he said. “But technical regulation will remain in the long term.”