Ant Financial, the affiliate of Alibaba, apologised for misleading users into allowing its Alipay service to share data on their spending habits with its credit-scoring arm Sesame Credit and other third-party services.
The mobile payment platform, which is used by millions of Chinese users to make the online purchase on Alibaba’s Taobao platform and elsewhere, led its users automatically checked a box and hidden language showing they agreed to share their data.
The fintech company said in a statement that it has since changed the opt-in policy and showed users how to change their settings.
“We are deeply sorry to everyone for the misunderstanding and panic this incident caused,” it said.
However, the outcry of users seems unusual in a country where the government heavily collects personal data on each person including financial, education and other information.
But, the status quo seems to be changing as the government last year implemented a controversial cybersecurity law that requires services to store user data in China and receive approval from users before sharing their details.
Alibaba has faced similar allegations in India last year when its web browser platform UC Browser allegedly leaked mobile data of its users in India.
The Indian government then said that it was reviewing the allegation against the Chinese company and might ban the browser in the country if found guilty.
The Ministry of Electronics and IT has actively been looking at findings of the University of Toronto which had allegedly discovered “several major privacy and security vulnerabilities that would seriously expose users of UC Browser to surveillance and other privacy violations”.
During late last year, an official in the Electronics and IT ministry hinted that in an attempt to ensure the protection of user data, the government might ask foreign handset makers to set up servers in India, especially as most Chinese smartphone vendors have servers in their home country, according to an Economic Times report.