HONG KONG: Chinese ridesharing company Didi Global Inc is in talks with state-owned information security company Westone to manage its data management and monitoring activities, sources said, as part of its efforts to appease national regulators.
China’s largest ridesharing group has become the target of an investigation by the country’s regulators just days after it raised $ 4.4 billion in an initial public offering in the United States.
China’s powerful Cyberspace Administration (CAC) launched a data-related cybersecurity investigation of Didi last month, citing the need to protect national security and the public interest.
Didi is in talks with Westone Information Industry Inc, which is said to be the main third-party company to manage its nationally stored big data in accordance with guidelines from national regulators, said two people with knowledge of the matter.
The sources declined to be named because they were not authorized to speak to the media.
Shenzhen-listed Didi, Westone, ACC and the State Council’s Information Office did not immediately respond to Reuters requests for comment after normal business hours in Asia on Friday.
Westone, which provides information security services and products, counts state-owned China Electronics Technology Cyber ââSecurity Co. Ltd as the parent company and largest shareholder, making it a prime candidate for Beijing. , said the people.
Didi has submitted proposals to Chinese regulators in recent weeks to allay their concerns, including using Westone to manage the rideshare company’s data across various industries, one of the people said.
The talks come amid Beijing’s growing crackdown on private companies over antitrust and data security concerns, which has erased billions of dollars from the market value of some local businesses in recent sessions.
Didi, which has approximately 377 million annual active users and 13 million annual active drivers in China, offers 25 million trips per day in China to users who register through an app using a phone number and password. .
Bloomberg reported on Friday that Didi is considering handing over the management of its data to a private third party as part of its efforts to resolve the regulatory investigation, without naming the company.
Didi’s talks with Westone indicate how Beijing is seeking to curb some large private companies after years of a more laissez-faire approach, and to involve state-backed companies in order to have tighter control over their operations. .
As part of the plan being discussed, Westone, who is based in southwest Sichuan Province, would be able to access Didi’s servers across the country to track collection, use and transfer. data from the latter, residents said.
It would also use its advanced encryption algorithm to prevent potential data breaches at Didi, the second person said. Encryption is regularly used to protect and securely transfer information online.
The CAC, which began a review of Didi’s handling of customer data in the middle of its New York enrollment drive, last month asked Didi to stop accepting new user registrations.
The regulator also said that Didi’s application “involved serious violations of laws and regulations relating to the collection of personal information.”