Ride-hailing firm Didi and social media giant Tencent will set up a cybersecurity lab to deal with online and offline threats that could potentially affect their operations amid intensified government scrutiny.

Why it’s important: China is home to the world’s largest internet population. As the domestic internet has flourished, so too has an illicit market for personal data, which bad actors have used to conduct fraud, identity theft, and blackmail.

  • The Chinese government has attempted to deal with cyber threats and data breaches by imposing numerous laws and regulations, but the market for online data continues to thrive.
  • Didi has struggled to regain its footing after a spate of safety incidents last year.

Details: Didi and Tencent announced the partnership on Tuesday, which will focus on information security, business security, and protection for emerging technologies including connected and autonomous vehicles.

  • The research will include fields such as facial recognition and anti-fraud protection. Didi has already implemented facial recognition checks for drivers on its platform.
  • Didi’s and Tencent Security will work together on the research.
  • Earlier this year, the company faced incidents of fraud after a syndicate that used data stolen online and fake payment credentials sold rides online without paying Didi for the services.

Context: The Chinese government is intensifying its push to improve data protection in the country, calling for companies to answer for offenses such as overcollection of personal information as well as data breaches.

  • Didi faces issues that are at the nexus of the online and offline worlds. The company is required to ensure the safety of its users during rides and also safeguard online data generated by the use of its services.
  • Last year, two passengers were murdered b their drivers on separate occasions while using Didi’s carpooling service Hitch. During one of the incidents, Didi’s facial recognition technology used to identify drivers proved to be ineffective.
  • The company subsequently suspended its Hitch service but has recently shown it was looking for ways to reintroduce the service.
  • Didi said it would invest another RMB 2 billion (around $290 million) on safety this year. The company has set up a safety team of 2,500 people.
  • Online and offline protection is of existential importance to Didi, as the government toughens its stance.

Christopher Udemans is TechNode's former Shanghai-based data and graphics reporter. He covered Chinese artificial intelligence, mobility, cleantech, and cybersecurity.

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