Alibaba Group Holdings Limited (NYSE: BABA) Among Chinese Tech Firms Facing Regulatory Control On Personal Data Collection

Alibaba Group Holdings Limited (NYSE: BABA) and other Chinese firms that collect personal data continue to face challenging times as Chinese regulators tighten laws governing the collection of data. Other companies affected include Inc. (NASDAQ: JD) and Baidu Inc. (NASDAQ: BIDU).

CAC introduces new regulations governing personal data companies can collect

On Thursday, the Cyberspace Administration of China (CAC) announced that it was looking for public feedback about draft regulations governing the sending of personal information overseas. The new regulations being developed are a component of Chinese officials’ efforts to increase control over vast amounts of data amassed by the nation’s private industry and its variety of well-liked apps.

According to the proposed regulations, organizations that collect personal information would be in charge of determining the validity, necessity, extent, and protection level of the data before transferring it overseas.

The proposal also discusses how domestic processors and international recipients should handle personal data. China has recently emphasized the dangers to national security posed by sending user data abroad. The draft regulations seek to enhance the data security law passed in September 2021. Companies will need approval for the cross-border transfer of essential and core data through a unique mechanism.

Firms are directed to halt user registration by CAC to commence new registrations. 

Two applications of logistics platform Full Truck Alliance Co Ltd (NYSE: YMM)  and the app of online hiring services firm Kanzhun Ltd (NASDAQ: BZ)  resumed registration of new users after indicating that they had rectified security issues and obtained the regulator’s consent.

In July last year, CAC commenced cybersecurity reviews into Kanhun and Full Truck Alliance alongside ridesharing firm Didi Global and directed them to halt the registration of new users citing public interest and national security.

Recently the Chinese government expressed support for the local technology sector, which has been under intense scrutiny for some time. Beijing has prioritized stability above all else in a year marked by geopolitical unpredictability and a pandemic comeback, especially as its senior officials get ready for a crucial leadership change at the end of 2022.

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Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing.

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