China Didi slapped with $1.2 billion penalty for fraudulent user data collection

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Chinese Administration of China (CAC) that looks into the activities of data collection and handling by companies has slapped a $1.2 billion USD or 8.026 billion yuan penalty on mobility startup Didi. The hefty penalty was imposed on the startup for fraudulently collecting data from customers for the past 7 years and handling it in a way causing concern towards national security.

Didi is the same company that was intending to take over a taxi service firm in the United States. But backed off from the deal during the regime of Ex President Donald Trump. As Mr. Trump complained about Chinese companies investing in North America, causing a kind of concern among the American populace. Despite the trade tirade, the company somehow started listing on the New York Stock Exchange since June 2021.

CAC claims DIDI handled the information of its 57 million passengers and 63 million customers in a way that was against the norms, like transmitting the mobile phone photos uploaded by customers to a database meant for a facial recognition project.

The penalty of 8.026 billion Yuan was claimed as per the annual revenue of the company that touched a figure of $27.32 billion last year.

A separate penalty of $148,640 was also imposed on the CEO and Founder Chen Wei and the firm’s president Jean Liu for acting blind against the serious security risks raised from the mismanagement of the generated user data.

Beijing based Didi reacted to the penalty and assured that it will pay the fine and will flex in security measures while storing and managing its user information.

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Naveen Goud is a writer at Cybersecurity Insiders covering topics such as Mergers & Acquisitions, Startups, Cyber Attacks, Cloud Security and Mobile Security

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