China Releases Rules on Data Security in Automotive Industry

China Releases Rules on Data Security in Automotive Industry

China has released rules related to the security of automotive data, requiring companies that process vehicle data to protect personal information collected from cars.

The rules, which will take effect on Oct. 1, target auto makers, component and software suppliers, dealers and other service companies that process data from cars in China. Such companies should fully inform and obtain consent from vehicle owners and passengers before collecting and using their personal data, according to rules published Friday by the Cyberspace Administration of China and four other ministries.

The rules, which follow a draft issued in May, also stipulated the different types of automotive data and how they should be handled. “Important data”, including sensitive military and government locations, big data on public transport and electric-vehicle charging facilities, as well as personal data sets for more than 100,000 people, should be stored in China, according to the rules.

Meanwhile, other types of data could be shipped overseas for business purposes, but they must be approved by the cyberspace regulator and other state agencies, the rules said.

As more vehicles become electrified or have greater autonomous capabilities, auto makers and others have been collecting more data from cars. Such moves have fuelled concerns among officials over risks associated with data security and data management.

China has restricted the use of Tesla Inc.’s vehicles by military staff and employees of key state-owned companies, The Wall Street Journal has reported.

The rules also set principles for processing auto data. They require the reduction of unnecessary and arbitrary collection and sharing of data. Under the rules, the data should be desensitized before they are processed to prevent any abuse.

They also require companies that process “important data” to review annually their data security management with local authorities, in line with China’s Data Security Law that will come into force in September.

Shares of Hong Kong-listed car makers broadly fell on Friday. Chinese electric car maker Li Auto Inc. closed down 4.0%, while rival XPeng Inc. fell 4.4%. Geely Automobile Holdings declined 3.9% and BYD Co. dropped 3.1%, all underperforming the Hang Seng Index’s 1.8% fall.

Also on Friday, China approved the Personal Information Protection Law, a sweeping privacy law that will curb data collection by technology companies, but analysts say this policy is unlikely to limit the state’s widespread use of surveillance.

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