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Alibaba shares a dip on the report of a link to a huge data theft

Shares of Alibaba fell 6% on Friday after a report linked the tech conglomerate’s cloud division to a massive police data theft being investigated by authorities in Shanghai.

An anonymous hacker, identified as “ChinaDan”, claimed in late June to have perpetrated one of the biggest data breaches in history by obtaining the personal information of more than one billion Chinese residents from the Shanghai police. He reportedly offered it for sale for bitcoins – around $200,000.

A database management dashboard remained “open” on the internet for over a year without a password, making it easier to access and retrieve its contents, the wall street journal reported, citing cybersecurity researchers.

Based on analyzes of the police database, researchers said the data was hosted on Alibaba’s cloud platform, which temporarily disabled access to the hacked database and launched a inspection after discovery of the theft, according to the report.

The report, citing sources familiar with the matter, also said Shanghai authorities summoned executives from the company’s cloud division over the data.

Shanghai government and spokespersons for Alibaba, as well as its cloud division, did not immediately respond to requests for comment. Chinese authorities have yet to confirm the breach.

SEE ALSO: Hacker claims to have stolen data on 1 billion Chinese in record breach

“At the mercy of regulators”

Alibaba’s share price fell 5.98% – the biggest daily percentage decline since June 13, and the stock was on track to end the week down 15.3% , its biggest weekly drop since its debut in the Hong Kong market in November 2019.

The company’s U.S.-listed shares had closed down 3.6% on Thursday.

Brock Silvers, chief investment officer at Kaiyuan Capital in Hong Kong, said if Alibaba was linked to the alleged breach, it would be “at the mercy of regulators in Beijing”.

“New cases could be in jeopardy until this case is resolved. Even when cleared, there is a risk of substantial fines,” he said.

The alleged violation comes as the Chinese regulators tighten data policy privacy and stepping up their surveillance of the country’s tech giants.

Alibaba’s cloud division, the country’s biggest player by market share, has already faced regulatory criticism. In December, China’s Ministry of Industry suspended a cooperation agreement with Alibaba Cloud over accusations that it failed to promptly report and fix a cybersecurity vulnerability.

Some local Chinese authorities have sought to move their data from private cloud systems. Last year, the city of Tianjin reportedly ordered municipally-controlled companies to migrate all their data to a state-backed cloud system.

  • Reuters with additional editing by Jim Pollard

SEE ALSO:

Beijing fines Alibaba and Tencent for breach of disclosure

China’s Alibaba cuts business ties with Ant Group

US says Chinese hackers are ‘compromising’ major telecom companies

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd newspapers in Sydney, Perth, London and Melbourne before touring South East Asia in the late 1990s. leader of The Nation for over 17 years and has a family in Bangkok.