On the third trading day after Didi’s listing in the United States, the Cyber Security Review Office issued an announcement, launching a cyber security review of Didi and suspending its new user registration. Two days later, the National Cyberspace Administration of China issued a notice stating that the Didi App collected and used personal information in serious violation of laws and regulations, and ordered all app stores to remove the Didi App. The laws cited in these investigations and decisions include the National Security Law of the People’s Republic of China and the Cybersecurity Law of the People’s Republic of China.
In response, Didi stated that it will resolutely implement the relevant requirements of relevant state departments and thank the competent authorities for guiding Didi to investigate risks. Users who have downloaded it before can use it normally and will not be affected.
From the market’s enthusiastic share price hike in the two days before the listing, to the continuous supervision of the two days, the survey results were released, and the rectification measures were severe and swift. Didi took a roller coaster within a week, and public opinion became lively, and various speculations abounded. Conspiracy theories have begun to take over, including: Didi packaged user data to the United States; Didi has a former US military officer on its board of directors, and so on.
These speculations and associations have not been true or have led to a clear causal relationship, and it is of little significance to investigate down the wrong road. In fact, things that happened to Didi were indeed rare and had a huge impact before, but if we put aside the temptation of conspiracy theories and look at these things themselves, we will find that there is nothing to be fuss about. They are bound to happen and will continue to happen. More about important technology companies operating in China.
Although the official announcement did not mention the listing of Didi, everyone knows that these things are related to the rapid completion of the listing of Didi.
As a listed company, it must accept the review of the place of listing, but it must also comply with the laws and regulations of the place of business. But it seems that when it comes to Chinese companies, people tend to be accustomed to the review of the regulatory agencies from overseas listing places and accept them all. On the contrary, they disagree with the review conducted by relevant departments in their own country where the business is actually operated.
In the past two years, the U.S. has become increasingly strict in its scrutiny of Chinese companies going public in the U.S., including many measures that specifically target Chinese companies. Under such circumstances, it is normal for the relevant Chinese authorities to improve all aspects of compliance review of overseas listed companies and complement the safety supervision of all links.
Compared with the independent review of Chinese companies proposed by the American Public Company Accounting Oversight Board (PCAOB) for the independent review of Chinese companies, China must submit audit papers that contain richer or more likely country-sensitive information. China has strengthened its own security review. It is more to fill in the deficiencies of the past. This is a kind of equivalence between the legal supervision of the place of listing and the legal compliance of the place where the operating entity is located. It will inevitably occur in which market and country.
Secondly, regardless of Didi’s listing background, in terms of antitrust and cybersecurity, data security and even national security reviews, the enforcement of Chinese regulators has always been lower than that of the United States.
The United States is more stringent than China. On the one hand, because giants that emerged from Silicon Valley became the earliest flag-holders in the Internet industry and brought data from the United States out of the country, a large amount of previous experience has become a strong and sensitive response mechanism. There is also that it has a more specific regulations, have more body have the right to participate in the investigation and the imposition of penalties, but due to the rapid development of China’s economic platform, soundness and adaptation aspects of the regulations have not kept pace. The anti-monopoly investigations and penalties that occurred in Didi and other Internet companies before are also manifestations of China’s rapid completion of laws and regulations. Judging from the various recent actions, China is also clarifying the form of government-based supervision and multi-sectoral linkage.
And this kind of change takes place at a time when the national competition surrounding technology companies is becoming more intense, and network security has become the most important element of national security, and it will inevitably come more fierce.
Last year, the TikTok and WeChat overseas version made people realize that the United States has begun to use the previously built strong regulatory “arsenal” on Chinese companies, and in many cases it does not pay much attention to procedural justice.
Therefore, based on the “National Security Law of the People’s Republic of China” and the “Network Security Law of the People’s Republic of China” and other laws, it is also a kind of reciprocity to conduct more in-depth technical security, data security and business security inspections for companies operating in China with core businesses: The United States will disregard the fact that TikTok’s data security is not in the interests of the United States. Of course, China must ensure that Didi, which has 15 million drivers, 180 million users and almost complete domestic road data, is absolutely safe after going public in the United States.
Didi’s problem is not that it will “hand over” the data to the United States, but the importance of these data and Didi’s technology to China itself, which makes it necessary to accept the public interest for protecting Chinese users and technology safety. Supervision and review.
This is why several other companies that have recently gone public in the United States, Truck Gang, Yunmanman and Boss Direct Employment have also begun to accept cyber security reviews. The former two belong to the Manbang Group, an intercity vehicle logistics and vehicle-to-cargo matching information platform that has a monopoly in the vehicle-to-cargo matching business; the latter is the domestic recruitment platform with the strongest momentum. In other words, one company has the main road information and transportation data in China, and the other has a large amount of talent information in China. Their compliance degree affects national security in the Internet age.
This time Didi’s incident is an anchor for this “equivalence thinking”. It will become a symbolic sample and become the norm when things of the same type appear in the future, and these censorships are destined not to stop only in “China”. Company”.
In addition, in the case of Didi, in accordance with the regulations of the cyber security review measures, companies have long been clearly required to actively apply for review. However, judging from the regulatory announcement, Didi did not complete these actions before listing. Behind this is Didi’s profitability pressure and pressure from capital. Liu Qing, the president of Didi, said in May last year that its core business, that is, ride-hailing, has only just begun to make a profit. And this is still not enough to smooth out the loss of Orange Heart Optimal for its fresh food e-commerce business. The largest travel company in China still needs to spin off Orange Heart Optimal in its prospectus to achieve its first profit in the first quarter of 2021.
On the other hand, Didi has so far completed 22 rounds of financing, with a financing amount of more than 20 billion. The last time Didi received strategic investment was two years ago. In other words, with Didi’s current size and financing scale, it is difficult to find new hot money, and it is difficult for interested new investors to follow up. . So Didi has only one way to go public, and the sooner the better.
Therefore, Didi’s “investigation” is actually just a process that it and all technology companies that have infrastructure attributes and master system key resources or core data should have completed on their own initiative.
This also shows that those who are accustomed to the rapid development of capital blessings share the costs among the public, while the benefits are in their hands; in the face of the increased costs brought about by better supervision, they habitually choose to game their benefits through precise calculations. Entrepreneurs who do not take the initiative to adjust themselves to the new compliance environment need to realize early that the times have changed.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/there-is-nothing-to-be-surprised-about-didi-being-investigated/
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