The Cyberspace Administration of China (CAC) initiated a cybersecurity review into U.S.-listed Boss Zhipin and subsidiaries of Full Track Alliance. The CAC said the probe had been opened to “prevent national data security risks” as the crackdown on the local tech sector continues. The government of China is trying to regulate the tech sector which grew largely unchecked over the years. Last month, China passed a new Data Security Law that lays out how companies collect, store, as well as use data.
Yunmanman and Huochebang, subsidiaries of Full Track Alliance were two of the firms named by CAC. Another company targeted by regulators is Boss Zhipin, an online recruitment platform backed by Tencent and listed on the Nasdaq. During the cybersecurity review, the companies mentioned above won’t be able to register new users.
China, tech companies, and interesting details
The latest crackdown comes after the CAC ordered the country’s app stores to remove ride-hailing app Didi for download just days after its initial public offering in the U.S.
The company raised $4.4 billion in an initial public offering. The tech giant made its trading debut last week on Wednesday in an IPO that valued Didi at $67.5 billion.
Founded by Will Cheng in 2012, Didi is no stranger to regulatory probes. This company illegally collected user’s personal information according to the Cyberspace Administration of China. The regulator asked Didi to fix the problems. The company stopped registering new users and it also made the decision to remove its app from app stores. Didi said it would make changes to comply with rules and protect users’ rights. Interestingly, its app was still working in China for people who downloaded it prior to CAC’s decision.
China is also focusing on antitrust and financial technology regulation. In April, Chinese regulators hit Alibaba with a $2.8 billion fine in its anti-monopoly anti-monopoly investigation of the tech giant. Regulators opened a probe into Alibaba’s monopolistic practices in 2020. In addition to the fine, Alibaba will have to file self-examination and compliance reports to China’s States Administration for Market Regulation for three years.