Didi Chuxing Technology Co., the Chinese ride-hailing juggernaut, that has been subjected to a year of compliance overhaul, is reportedly facing a fine of nearly USD 1.28 billion, which accounts for approximately 4.7 percent of Didi's USD 25.73 billion sales from the year before.

In addition to this, the country's law enforcement agencies will permit Didi to re-establish its app in domestic app stores.

It is worth mentioning that Didi was once the biggest mobility platform in China, with over 500 million annual active users, who were required by law to be validated in the country, which meant the company had access to vast amounts of location data that could be regarded delicate.

Last July, the Chinese government initiated an information security investigation into Didi, a few days following the company raising USD 4 billion in its IPO on the NY Stock Exchange. Later, policymakers removed the app from Chinese app stores, claiming it was illegitimately accumulating customer data.

The penalties are primarily the result of the company's failings to guarantee China that its data was protected before going public in New York, which could have involved exchange with US regulators.

With tensions between US and China at an all-time high, Didi hopes to cap off a turbulent year by listing its shares on the Hong Kong Stock Exchange, which has already attracted a myriad of secondary listings by Chinese tech firms trading in the United States such as Alibaba, Baidu, etc.

Notably, the United States has added several technology behemoths from China to a roster of companies that could be delisted if they struggle to meet the Securities and Exchange Commission's (SEC) compliance requirements.

While it is questionable how Didi has improved its data protection structure, its journey will serve as a model for other domestic technology providers pursuing overseas investors.

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https://techcrunch.com/2022/07/19/china-fine-didi-1-billion/