Following Didi Chuxing, Winmanman, Huochufang, and BOSS Zpin Undergo 'Internet Security Review'
4 Platforms Share Traits: US Listing, Location Data and Personal Information Management, Monopoly Position
[Asia Economy Beijing=Special Correspondent Jo Young-shin] On the 5th, the China Internet Security Review Office announced that it will conduct an 'Internet Security Review' on three online platform companies: Winmanman, Huochefang, and BOSS Zhipin.
Winmanman and Huochefang are digital freight transportation platforms that connect shippers and freight vehicles, often referred to as the Didi Chuxing of the freight industry. Both platforms are operated by Manbang Group. It is reported that more than 20% (2.8 million) of China's large and medium truck drivers use these platforms.
BOSS Zhipin is a Chinese recruitment platform, with reportedly 85.8 million certified job seekers last year. It is mainly used by Chinese small and medium-sized enterprises.
The Internet Security Review Office announced on the 2nd that it is investigating Didi Chuxing, China's largest ride-sharing company, from the perspective of preventing national data security risks, protecting national security, and prohibiting monopolies.
Like Didi Chuxing, these three platforms cannot recruit new members while the investigation is ongoing. Didi Chuxing has been removed from Chinese app stores and new registrations are not allowed until the investigation is completed.
All three platforms undergoing the internet security review along with Didi Chuxing share the commonality of having recently been listed on U.S. stock exchanges. BOSS Zhipin was listed on Nasdaq in May, while Manbang Group and Didi Chuxing were listed on the New York Stock Exchange last month.
They also similarly use transportation infrastructure data (geographical and location data) within China and handle personal information. Additionally, Didi Chuxing, Winmanman, and Huochefang all enjoy monopolistic positions in the Chinese market.
Huanqiu Shibao reported on the same day that Didi Chuxing had 493 million users last year and that the information managed by Didi Chuxing is related to 'national data sovereignty.' This suggests that the investigation began due to concerns that transportation infrastructure data and personal information managed by Didi Chuxing in China could be leaked to the U.S. following its U.S. stock listing. There is also a sentiment that Chinese transportation data may have already flowed to the U.S. for listing review purposes.
Winmanman, Huochefang, and BOSS Zhipin all appear to be under similar suspicion by Chinese regulatory authorities as Didi Chuxing and are likely to face similar investigations.
Chinese economic media Caixin quoted insiders saying, "In April, Chinese authorities summoned 34 major internet companies and urged them to conduct 'self-inspections for violations.' Didi Chuxing secretly prepared for its U.S. listing in mid-April and handed over some materials to the U.S."
It also reported that in April, Manbang and some other platforms had reserved meetings with Chinese transportation authorities, during which they were criticized for unreasonable pricing structures, unfair operating rules, and infringement on the legitimate rights and interests of truck drivers.
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