WEBVTT - Edwin Chan on Didi (Radio)

0:00:00.120 --> 0:00:02.720
<v Speaker 1>Let's get to Hong Kong to take a closer look

0:00:02.759 --> 0:00:05.240
<v Speaker 1>at this story, first featured by the Wall Street Journal.

0:00:05.240 --> 0:00:08.880
<v Speaker 1>Authorities in China are expected to find d D global

0:00:08.920 --> 0:00:11.960
<v Speaker 1>more than a billion dollars. Reuters is now reporting a

0:00:12.000 --> 0:00:16.000
<v Speaker 1>similar account the charge with cap Aijing's year long probe

0:00:16.079 --> 0:00:18.239
<v Speaker 1>into the right hailing giant. We're going to take a

0:00:18.280 --> 0:00:21.560
<v Speaker 1>closer look with our own Edwin Chan. He is Bloomberg's

0:00:21.600 --> 0:00:23.919
<v Speaker 1>Asia tech team leader, joining us from our studio in

0:00:24.000 --> 0:00:26.560
<v Speaker 1>Hong Kong. Edwin, thanks for being with us. So d

0:00:26.720 --> 0:00:29.680
<v Speaker 1>D pays a billion dollars, which seems like a lot.

0:00:29.760 --> 0:00:31.880
<v Speaker 1>What's next is the worst of the crackdown for d

0:00:32.000 --> 0:00:36.600
<v Speaker 1>D over I think right the biggest question is right

0:00:36.600 --> 0:00:40.040
<v Speaker 1>now with events beyond and all of it, and it's

0:00:40.080 --> 0:00:42.320
<v Speaker 1>not at all clear to me, at least based on

0:00:42.360 --> 0:00:45.239
<v Speaker 1>our reporting, that they're going to get away with just

0:00:45.320 --> 0:00:49.120
<v Speaker 1>a billion dollars in fines, which too many observers would

0:00:49.120 --> 0:00:52.040
<v Speaker 1>have been would be what amount to a slap on

0:00:52.120 --> 0:00:55.200
<v Speaker 1>the wrist. I mean, think back to a year ago

0:00:55.320 --> 0:01:00.320
<v Speaker 1>when when d D had it's much talented ip with

0:01:00.320 --> 0:01:02.880
<v Speaker 1>a lot of fanfare in New York and days later

0:01:03.760 --> 0:01:06.560
<v Speaker 1>the authorities came down on them like a ton of bricks.

0:01:06.840 --> 0:01:12.240
<v Speaker 1>And since then it's been kind of unrelenting um regulations

0:01:12.319 --> 0:01:19.160
<v Speaker 1>and restrictions and public censure, state media criticism. Uh you know.

0:01:19.280 --> 0:01:23.839
<v Speaker 1>They they had to remove their apps from stores and

0:01:24.520 --> 0:01:29.839
<v Speaker 1>potentially there was talk of uh quote unquote unprecedented penalties

0:01:30.200 --> 0:01:32.560
<v Speaker 1>and they were forced to delist. So right now they're

0:01:32.560 --> 0:01:35.440
<v Speaker 1>treating as a pink sheet in New York, which is

0:01:35.520 --> 0:01:41.960
<v Speaker 1>usually a market reserved for uh less solid companies. And

0:01:42.080 --> 0:01:45.320
<v Speaker 1>it's that that that their fate is kind of uncertain

0:01:45.440 --> 0:01:48.760
<v Speaker 1>right now whether they can even you know, make that

0:01:48.920 --> 0:01:52.560
<v Speaker 1>journey back to becoming a listed company again. So Beijing

0:01:52.600 --> 0:01:55.480
<v Speaker 1>has find other Chinese tech firms. I'm thinking Ali Baba

0:01:55.480 --> 0:01:58.040
<v Speaker 1>and I think the figure was around two point seven

0:01:58.120 --> 0:02:01.760
<v Speaker 1>five billion and the delivery and ma Chuan was find

0:02:01.800 --> 0:02:06.400
<v Speaker 1>about five million dollars as part of a crackdown. Is

0:02:06.440 --> 0:02:10.799
<v Speaker 1>there a formula that the antitrust regulator is using when

0:02:10.880 --> 0:02:15.880
<v Speaker 1>determining the amount of these fines. Yes, in most cases

0:02:16.000 --> 0:02:19.520
<v Speaker 1>there are anti trust guidelines where you are allowed to

0:02:19.560 --> 0:02:24.360
<v Speaker 1>find a certain percentage of say the previous year's domestic revenue.

0:02:24.400 --> 0:02:27.040
<v Speaker 1>So that was the formula formula very employed in Ali

0:02:27.080 --> 0:02:30.280
<v Speaker 1>Baba's case, for instance, which was a record find and

0:02:30.400 --> 0:02:33.560
<v Speaker 1>that was two point eight billion. Indeed, these case it's

0:02:33.639 --> 0:02:40.040
<v Speaker 1>less clear that the regulator overseeing this saga is a

0:02:40.160 --> 0:02:44.240
<v Speaker 1>very different one the cyberspace administration of China. And I again,

0:02:44.280 --> 0:02:47.920
<v Speaker 1>if you recall the events of a year ago, indeed,

0:02:47.919 --> 0:02:51.880
<v Speaker 1>these cases, it was wasn't only kind of an anti trust,

0:02:51.960 --> 0:02:57.960
<v Speaker 1>anti competitive issue. It basically was a very um systemic

0:02:58.080 --> 0:03:01.120
<v Speaker 1>data issue according to the SEA a C. And it

0:03:01.240 --> 0:03:05.640
<v Speaker 1>sparked a nationwide clamped down on data security as well

0:03:05.720 --> 0:03:10.000
<v Speaker 1>as freezing you know, a multibillion dollars some multi jillion

0:03:10.040 --> 0:03:14.120
<v Speaker 1>dollar I puor pipeline that still hasn't really resumed. So

0:03:14.240 --> 0:03:17.519
<v Speaker 1>if if you just look at those two cases side

0:03:17.520 --> 0:03:20.440
<v Speaker 1>by side, I there are there are many who would

0:03:20.480 --> 0:03:25.320
<v Speaker 1>say that d d's issue is of a different scale.

0:03:25.760 --> 0:03:27.840
<v Speaker 1>I shall we say, then Ali Baba is all meat

0:03:28.000 --> 0:03:30.080
<v Speaker 1>once Well, I think it goes without saying that there

0:03:30.200 --> 0:03:32.440
<v Speaker 1>was created a bit of a sigh of relief. I

0:03:32.480 --> 0:03:34.359
<v Speaker 1>think for d D investors, the a d R s

0:03:34.400 --> 0:03:37.080
<v Speaker 1>today in New York, we're up by more than Edwin.

0:03:37.120 --> 0:03:39.800
<v Speaker 1>Thanks for being with us and sharing your expertise. Edwin

0:03:39.920 --> 0:03:42.120
<v Speaker 1>Chann is Bloomberg Asian Tech team leader,