China tech crackdown focuses on data after Didi inquiry


Traders work during the IPO of Chinese ridesharing company Didi Global Inc on the New York Stock Exchange (NYSE) floor in New York, United States on June 30, 2021.

Brendan McDermid | Reuters

Chinese tech giants have become some of the most valuable companies in the world largely unchecked by regulation – but that is about to change.

Since the cybersecurity law of 2017, China has put in place some regulations regarding data.

But in June, the Data Security Law was passed, which sets the rules for how businesses collect, store, process and transfer data. It comes into force in September.

A separate law called the Privacy Act is also under development. If passed, it will give users more control over their data.

“We can certainly expect to see a lot of crackdown on user data as soon as these two laws are passed,” Schaefer said. “It’s definitely another (regulatory) front.”

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The investigations into Didi, Full Truck Alliance and Boss Zhipin do not fall under these new laws, but under existing regulations. While the cases may seem sudden, regulators have been in contact with several tech companies on a number of issues, including data regulation and anti-competitive practices.

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

“It started in April and they (the Chinese government) have given companies over 100 pieces of compliance requirements covering many aspects, antitrust, data, advertising, pricing and a lot of things,” a lawyer who works with Chinese technology companies on compliance. told CNBC.

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


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