China warns internet companies over weak data protection policies

Industry regulator singles out Baidu, Ant Financial and ByteDance, the operator of news app Jinri Toutiao, for inadequate data privacy measures

PUBLISHED : Friday, 12 January, 2018, 8:21pm
UPDATED : Friday, 12 January, 2018, 8:24pm

The Chinese government has admonished the country’s internet companies in light of mounting complaints over breach of privacy, as more than 700 million people on the mainland share personal information to digital services that they use everyday like those for online search, shopping and investing.

The Ministry of Industry and Information Technology (MIIT) said internet search provider Baidu, Alipay operator Ant Financial Services Group and Beijing ByteDance Technology, which runs popular news aggregator Jinri Toutiao, had been negligent in telling users about how collected personal data is used, according to a statement posted on the regulator’s website on Friday.

Its move followed a series of media reports about how the services operated by those three companies have misled users and violated their privacy.

Baidu, ByteDance and Ant Financial were also directed by the MIIT to immediately make the appropriate improvements in protecting user data.

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“All the internet companies must not collect user information that is not necessary for providing services, must not use the information for purposes other than providing services, must not illegally sell or provide user information to others,” the MIIT said.

In addition, the regulator said it will monitor the policies of the companies, warning them of severe punishment for any violations. It did not elaborate about potential penalties.

Ant Financial, an affiliate of Alibaba Group Holding, was quick to respond to the government’s warning. New York-listed Alibaba owns the South China Morning Post.

“We have immediately initiated a comprehensive review of our privacy protection policy across the business,” said Nie Zhengjun, the chief privacy officer at Ant Financial, in a statement on Friday.

“We have established a team that will be dedicated to protecting user data and safeguarding privacy throughout the company,” he said. “This team will enhance training for all employees and put in place a system to evaluate user data protection.”

Ant Financial last week apologised for making the opt-in to its social credit scoring service the default when users opened a new report in the app, a move that angered some people who felt the company was misleading them into handing over their data.

Nie said Ant Financial was committed to continuously improving its user data security.

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“We are also committed to working with partners on the Alipay platform to collectively enhance these policies and safeguard user privacy,” he said.

Representatives of Baidu and Bytedance were not available to respond.

The start of this year saw China’s three biggest internet companies by market value – Tencent Holdings, Alibaba and Baidu – face increased public backlash over the way they handle user data amid increased concerns by Chinese consumers about privacy.

Tencent came under fire for its popular WeChat messaging app after Chinese automotive industry tycoon Li Shufu reportedly slammed the company for invading user privacy.

Li, who is the founder and chairman of carmaker Zhejiang Geely Holding Group, said at a public event early last week that Tencent chairman Pony Ma Huateng “is watching us through WeChat everyday because he can see whatever he wants”.

WeChat later clarified in a post on its official account that the content of conversations are stored only on the user’s smartphone, personal computer or other internet terminal, adding that the company does not use any of the content for big data analysis.

Complaints against ByteDance involved spying on conversations when its mobile news app, Jinri Toutiao, is given access to a smartphone user’s microphone. The company has denied it can eavesdrop on conversations.