China chides tech firms over privacy safeguards

China reprimanded three top tech firms on Friday over poor privacy protections, as tech companies face an increasing backlash from consumers and authorities over excessive data collection practices.

Alibaba payment affiliate Ant Financial, search firm Baidu and Beijing Bytedance, which oversees popular news feed app Jinri Toutiao, were named by the Ministry of Industry and Information Technology (MIIT) in a notice posted on it website on Friday.

The regulator said the firms had “inadequate” policies relating to personal information protection, and that any violations would be investigated and “severely punished.”

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The notice did not detail any specific punishments.

Chinese payment and social media firms have enjoyed rapid growth driven by the country’s young and mobile-savvy population. But recently top tech companies have drawn criticism from users, competitors and consumer groups over shoddy data collection and sharing practices.

Ant Financial’s Alipay was scolded by cyber regulators on Thursday after users discovered that a feature detailing spending statistics automatically enrolled them into the company’s credit rating program, giving Alipay access to a wide array of user data.

Ant Financial has since suspended the program and says it is conducting an internal review. It did not have additional comment on Friday.

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Last week a government-backed consumer protection group said it is suing Baidu in the eastern province of Jiangsu for failing to properly notify users about which data it is collecting.

Baidu and Beijing Bytedance did not immediately respond to requests for comment.

Friday’s notice from MIIT says the companies will conduct a review to improve product design and internal management practices.

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