China is cracking down on data privacy. That's terrible news for some of its biggest tech companies

China spent months clipping the wings of some of its tech champions over concerns that they were crowding out the competition. Now Beijing is seizing on data privacy as the next step in a sweeping campaign that threatens to cut companies off from global investment. The country's extraordinary clampdown on Didi has focused on allegations that the ride-hailing company has mishandled sensitive data about its users in China.

Already, the company that elbowed Uber out of China has been kicked off app stores in the country and warned that it violated laws about data collection. The regulatory pressure has upended its first days as a publicly traded company in New York, with shares plummeting nearly 20% on Tuesday and retreating even more on Wednesday. All told, Didi has shed some $29 billion in market value from its peak.

The company has said that it would "strive to rectify any problems" and "protect users' privacy and data security and prevent cybersecurity risks." But the firestorm still poses some serious questions about Didi's business, and it has acknowledged that revenue in China may take a hit.

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