Major Data Protection Law Passed by China May Badly Inflict Stock Prices of US-Listed Companies
As per the latest reports, the government of China has made an announcement that is going to be very alarming for China-based US-listed tech companies. According to reports, the government of China has passed a new law that is pertaining to data protection.
The sources reveal that the particular law was passed by the government of China on Friday, August 20, 2021. With the implementation of the new law, more strict policies and regulations will be introduced/implemented on tech companies. The strictness in regulations would be for the collection of information and it would directly impact tech companies.
The analysts are predicting that the new law surrounding data protection would ensure tech companies handle information in a much-regulated manner. However, this could have a very drastic impact on the way tech companies operate and collect user information.
The companies will be required to strictly adhere to the regulations and requirements for operating in the country and around the world. The new law has been passed by the Chinese Government amid the scrutiny that the regulatory authorities have launched against tech companies enlisted on the US stock markets.
The particular law that has been introduced for the strict regulation of data protection is called the Personal Information Protection Law (PIPL). The particular law is known to offer a set of rules that are very comprehensive when it comes to the collection of data.
Furthermore, the law also provides guidelines on the protection and processing of data and information that the tech companies deal with. In the past, such companies had very light and very flexible regulations surrounding the handling and protection of data.
This time, the Chinese Government, with the intervention of the regulators has introduced and passed the real deal. Now, the tech companies will be under close observation by the regulatory authorities in China. If any company tries to breach the policies or tries to avoid/ignore the regulations, they will be met with strict regulatory actions.
Prior to the passing of the law, several drafts had been proposed by the legislature for approval. Finally, the decision was made on the new law by the legislature on Friday, August 20, 2021. The entire process was fully covered by the local media channels in China.
Although it has been confirmed that the new law has been passed by the legislature, yet the law’s final version is pending publishing.
In the previous drafts, it was added that it would be up to the sole discretion of the consumers whether they would like to share their information or not. It added that even if the consumer disagrees with sharing information, the companies would let the consumer use their services.
With the implementation of the new law, there are high chances that the companies may end up losing the trust of investors and their share prices may end up facing downfall.