Luckin Coffee is one of nearly 20 companies that could have its app removed from app stores. All 20 were called out by the Chinese government for violating privacy protection rules.
Why it matters: The embattled coffee giant admitted earlier this month that several of its employees, including its management team, fabricated sales for much of 2019, with the fake transactions amounting to around RMB 2.2 billion ($312 million).
- The Nasdaq-listed company’s share price plummeted by more than 75% shortly after the disclosure.
- China’s regulators have been cracking down on how companies collect consumers’ personal data.
- Regulators announced in December that work on new security and personal information protection laws would begin this year.
Details: China’s National Computer Virus Emergency Response Center (CVERC) said on Friday that a version of Luckin’s mobile app, along with applications from Pizza Hut, Yonghui Superstores, grocery delivery platform Meicai, and Pingan Good Doctor had violated rules governing data collection.
- The CVERC found that Luckin and the majority of the other apps did not state clearly to users how they would use their data or didn’t provide effective measures allowing users to correct or delete personal information, or to close their accounts.
- Other companies also found to be in violation of the rules include online healthcare providers More Health and Haodaifu, and online education platform Kehou, among others.
- The CVERC said it would issue a notice to have the apps removed.
- TechNode found that on Monday that Luckin’s app could still be downloaded from Chinese Android app stores as well as Apple’s China App Store.
Context: China has led a crackdown on app developers that don’t adhere to regulations governing data collection.
- Some of China’s biggest tech companies have fond themselves caught up in the offensive.
- In December, Tencent, Xiaomi, and Sina Weibo were all found to “illegally collect and use personal data, excessively request user authorization, or create unnecessary hurdles for unsubscribing users.”
- The CVERC falls under the State Council, China’s cabinet. It was initially established by the Tianjin Public Security Bureau in 1996 and is responsible for detecting and monitoring virus outbreaks in China.