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China’s internet regulator on Saturday decided to require data-rich tech companies to submit to cybersecurity reviews before any foreign listing, making explicit for the first time a data security requirement that has marred the bid. initial public offering of Didi Global Inc.
In addition, the main Chinese antitrust regulator on Saturday blocked the offer of Tencent Holding Ltd. to combine the two largest video game streaming platforms in the country, its first public intervention to stop a merger in the Chinese tech sector.
The measures come at the end of a week marked by a wave of actions from Beijing aimed at subduing the country’s tech giants. The two measures are the clearest signals to date that authorities are tightening the leash on Chinese companies listed overseas amid concerns over data security. It also shows that regulators are rethinking the Bigger is Better mentality that has enabled local companies like Tencent and Alibaba Group Holding Ltd. to become global players.
The security review review, released by China’s Cyberspace Administration for public comment on Saturday, said companies with personal data on at least one million users should apply for a cybersecurity review. Previously, companies seeking to be listed overseas were not explicitly required to conduct such reviews, although they usually do if requested by officials.
The Wall Street Journal earlier reported that Didi, the Chinese rideshare company, continued its $ 4.4 billion New York IPO late last month, despite the insistence of the Chinese internet regulator. to undergo a cybersecurity exam.
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