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After an 18-month security investigation, Didi receives approval from China to relaunch

Didi, China’s dominant ride-hailing service, returned on Monday after being banned for 18 months. This shift occurred when China’s three-year regulatory crackdown on the internet industry began to show indications of loosening.

Due to “illegally collecting user data,” Chinese authorities demanded in July 2021 that Didi be removed from the country’s app stores. Didi had its first public offering in New York earlier the same month. The company’s first public offering brought in a whopping $4 billion, but the success was short-lived as it proved to be the catalyst for its spat with Beijing.

Reports and an investor document viewed at the time suggest that before going public in the U.S., where the data of hundreds of millions of Chinese people may purportedly be subject to inspection, Did neglected to satisfy the government that its cross-border data methods were safe. Due to this blunder, China’s top internet authority conducted a security probe lasting over a year and a half.

As of a Monday afternoon Weibo post, it seems that Didi’s term of penance and correction is at an end.

Our firm has made significant efforts to address the security concerns uncovered by the investigation, cooperate with the national cybersecurity assessment, and make all necessary corrections.

Didi’s primary ride-hailing platform, Didi Chuxing, has been cleared for new user registration by the Cybersecurity Review Office, a recently established government body charged with addressing data security risks faced by internet companies.

According to reports, Didi was also fined $1 billion for breaking regulations, in addition to having to rework its data infrastructure. To better navigate the developing U.S.-China tensions, it delisted from the NYSE in May of last year and has since been preparing for a relisting on the Hong Kong Stock Exchange.

Didi customers who downloaded the app before the resumption of user registration might continue to use it. However, the app was flooded with competition. For instance, Alibaba’s mapping service AutoNavi has been making headway as an aggregator of independent ride-hailing platforms like Didi.

The days of unchecked expansion in the ridesharing market are likewise behind us. In recent years, China has increased its regulation of the innovative firm, bringing it into line with the conventional state-owned taxi sector.

After the new rules go into effect, Didi will undoubtedly be considerably more careful about crossing the government’s red line.

The business claimed in a Weibo post that it will “use effective techniques to secure the security of the platform’s infrastructure and large data” in an effort to protect national cybersecurity.