Xiaoyuan Souti ordered to rectify for infringing personal information rights
On February 19, the Cyberspace Administration of China (CAC) carried out a law-based, coordinated enforcement action against a batch of illegal apps that infringed on personal information rights. Xiaoyuan Souti (小猿搜题), a popular education app under Yuanfudao, was among those named.
Xiaoyuan Souti is a wildly popular problem-solving tool for students on the Chinese internet. It covers all subjects from junior high to high school, and can search text, formulas, and tables. Users simply take a photo in the Xiaoyuan Souti app, and a detailed solution process is automatically displayed. The app now has over 41 million monthly active users in mainland China.
According to the notice, the main issue with Xiaoyuan Souti is its failure to provide an effective user account deletion function. Under the CAC’s decision, if Xiaoyuan Souti fails to complete rectification within 30 days, it will face removal from app stores.
In recent years, with the successive promulgation of the Personal Information Protection Law and the Regulations on Network Data Security Management, China’s regulation of app data compliance has intensified. Many apps with sizable user bases have been penalized multiple times for violations. Industry insiders note that user numbers and activity are key metrics for valuing apps. To make their data look better, some operators try to retain user accounts as much as possible and are reluctant to allow easy cancellation even if users have been inactive for a long time, in order to maintain a higher user base. In addition, user data is highly valuable to app operators for analyzing user behavior and preferences, supporting precision marketing, product optimization, and more.
Founded in 2012, Yuanfudao is one of China’s leading online education companies. It offers diversified technology-empowered education services, providing a variety of products including the online tutoring app Yuanfudao, the smart learning app Zebra, the self-adaptive question bank Yuantiku, intelligent correction tool Xiaoyuan Kousuan, and Xiaoyuan Souti, an app for searching and answering questions.
However, compliance issues are not limited to Xiaoyuan Souti. As early as January 2022, Xiaoyuan Kousuan was notified by the National Computer Virus Emergency Response Center of China for suspected privacy non-compliance due to failing to clearly inform users of all the privacy-related permissions it requested.
These developments also reveal compliance deficiencies at Xiaoyuan Souti. Industry insiders point out that internet companies should treat compliant operations as the cornerstone of corporate development, embrace a business philosophy that respects laws and regulations and protects user rights and interests, and must not neglect compliance requirements in pursuit of economic gains.
China’s domestic compliance requirements for apps regarding data security and personal information protection are becoming increasingly stringent, and penalties and takedowns are commonplace. Many foreign app developers hoping to make their mark in the Chinese market must gain a deep understanding of China’s compliance requirements. Any app listed on domestic app stores is subject to strict store reviews and frequent government spot checks. If non-compliance is discovered, you must remedy it in a short time or face the risk of takedown and fines, leading to significant user and financial losses.
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