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UPDATE 1-China's cyber watchdog scolds Ant Financial over user privacy breach

From Reuters - January 10, 2018

SHANGHAI (Reuters) - Chinas cyber watchdog has scolded Ant Financial, Alibabas payment affiliate, for compromising user privacy after many users of its Alipay service were automatically enrolled in its credit scoring system.

The Cyberspace Administration of China (CAC) said in a statement it had summoned Ant Financial representatives to a meeting last Saturday and told them they had failed to meet the countrys personal information security standards.

The rap over the knuckles adds to a tough start to the year for Ant Financial [ANTFIN.UL] which was recently blocked by U.S. regulators from acquiring MoneyGram International Inc.

It is also grappling with new regulations, requiring mobile payment firms to sharply increase the amount of client funds in interest-free reserve accounts, which will likely reduce profits.

Alipay has a popular end-of-year feature that allows its customers to analyse how they have spent their money over the year. At the end of 2017, the feature began enrolling users who wanted to look at their bills into the credit scoring system, Sesame Credit.

That allowed Sesame Credit to collect their data and share the analysis with its partners. Users could only opt out if they unchecked a button on the features landing page.

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