EXPLAINER: Why China is investigating tech firms like Didi

HONG KONG (AP) — Chinese regulators have clamped down on the country’s largest ride-hailing app, Didi Global Inc., days after its shares began trading in New York. Authorities told Didi to stop new registrations and ordered its app removed from China’s app stores pending a cybersecurity review. The government said it was acting to prevent security risks and protect the public interest. Didi is the latest company to face intensified scrutiny in a crackdown on some of China’s biggest technology giants.

WHAT IS DIDI?

China’s Didi Global Inc. is one of the world’s largest ride-hailing apps. Three-quarters of its 493 million annual active users are in China. Beijing-based Didi operates in 14 other countries including Brazil and Mexico.

Years ago, Didi and Uber competed in China. In 2016, after a two-year price war, Didi bought Uber’s China operations.

Didi raised $4.4 billion in a June 30 initial public offering in New York.

WHY DIDI IS IN TROUBLE

China’s cyberspace watchdog said it suspects Didi was involved in illegal collection and use of personal data. It did not cite any specific violations.

The state-owned newspaper Global Times said in an editorial Monday that Didi has the “most detailed personal travel information” of users among all large technology firms. It said the company could conduct big data analysis of users’ habits and behavior, posing a potential risk for individuals.

THE WIDER CONTEXT

Chinese authorities said Tuesday said they would step up supervision of companies listed overseas. Under the new measures, there will be improved regulation regarding data security and cross-border data flows, as well as the management of confidential data.

Authorities also plan to crack down on illegal activity in the securities market, and will investigate and punish...