China to fine Didi over $1 billion for data breaches, sources said

Sources familiar with the issue claimed on Tuesday that Chinese regulators are set to fine ride-hailing giant Didi Global over $1 billion for data breaches, which may put an end to the ongoing investigation into the company’s cybersecurity practices. 

Sources, who asked to remain anonymous as the news hasn’t been officially announced yet, said that authorities will fine Didi 8 billion yuan (approx. $1.28 billion) which accounts for 4.7% of $27.3 billion total revenue the company reported in 2021, as reported by the Wall Street Journal. 

Last year, Chinese regulators started an investigation into Didi a week after the company raised $4.4 billion in an upsized US IPO and also ordered a ban on the new downloads of its apps for illegally collecting user data. Following the ban, Didi lost $22 billion in market cap and its shares fell as much as 30% as of July 2021. 

The company announced in December that it would delist from the New York Stock Exchange and is now reportedly planning to go private to calm authorities. 

Sources said that after the new penalty, authorities could lift the ban on Didi apps and allow them to be restored on the Chinese app stores.

Last year, Chinese authorities also imposed a fine of $2.75 billion on e-commerce giant Alibaba and $527 million on leading delivery firm Meituan.