China lifts 18-month ban on new Didi users as tech crackdown wanes

[January 16, 2023]  By Julie Zhu and Yingzhi Yang

(Reuters) -China's Didi Global has been given the green light from domestic regulators to resume new user registrations for its core ride-hailing services effective from Monday, signalling its 1-1/2-year long regulatory-driven revamp is ending.

Didi has been awaiting approval to resume new user registrations and downloads of its 25 banned apps in China as a key step to return to normal business since its regulatory troubles started in mid-2021.

Reuters reported on Friday, citing sources, that Chinese authorities were set to allow Didi to resume new user registrations and downloads of its apps at home as soon as this week.

"Our company has earnestly cooperated with the country's cybersecurity review, seriously dealt with the security problems found in the review and carried out comprehensive rectifications for more than one year," it said in a statement on Monday.
 

Didi would also take effective measures to ensure platform safety and data security, and safeguard national cyberspace security, it added in the statement.

The latest move comes as Chinese policymakers are seeking to restore private sector confidence and counting on the technology industry to help spur economic activity that has been ravaged by the COVID-19 pandemic.

Didi will need its flagship ride-hailing and other apps to be back on domestic app stores to win new users, though the statement did not specifically mention that.

A man walks past a Didi logo at the headquarters of Didi Chuxing in Beijing, China November 20, 2020. REUTERS/Florence Lo/Files

The ride-hailer, launched in Beijing in 2012 and backed by prominent investors including Alibaba, Tencent and SoftBank Group, ran afoul of powerful regulator the Cyberspace Administration of China (CAC) when in 2021 it pressed ahead with its U.S. stock listing against the regulator's will, sources previously told Reuters.

Didi's regulatory woes then started, with its 25 mobile apps ordered taken down from app stores, the registrations of new users suspended, and a $1.2 billion fine over data-security breaches.

The company paid the fine last year, the largest regulatory penalty imposed on a Chinese tech firm since Alibaba and Meituan were fined $2.75 billion and $527 million, respectively, in 2021 by antitrust regulator the State Administration for Market Regulation, sources have told Reuters.

It was also forced to end its 11-month-long journey as a New York Stock Exchange-traded company in June last year, turning it from a poster child of China's internet boom to one of the biggest casualties of Beijing's regulatory crackdown.

The regulatory troubles have hit Didi badly, chipping away at its dominance and allowing rival ride-hailing services operated by automakers Geely and SAIC Motor to gain market share across the country.

(Reporting by Yingzhi Yang and Julie Zhu; Editing by Tom Hogue, Emelia Sithole-Matarise and Christian Schmollinger)

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