Tuesday Tech Briefing: Shared-Car Users Join Bike Startup Customers in Deposit Refund Struggle

1. Google’s Secret China Project “Effectively Ended” After Internal Confrontation

Google has been forced to shut down a data analysis system it was using to develop a censored search engine for China after members of the company’s privacy team raised internal complaints that it had been kept secret from them, The Intercept reports.

The internal rift over the system has had massive ramifications, effectively ending work on the censored search engine, known as Dragonfly, according to two sources familiar with the plans. The incident represents a major blow to top Google executives, including CEO Sundar Pichai, who have over the last two years made the China project one of their main priorities. (The Intercept)

2. Frustrated Shared-Bike Riders Go to Ofo in Search of Refunds

Users of the cash-strapped shared-bike app Ofo are showing they won’t go down without a fight, gathering in droves at the company’s Beijing offices in the city’s high-tech hub known as Zhongguancun in a bid to get back deposits worth the equivalent of up to $30.

A line of more than 100 people formed in the lobby of Ofo’s offices and spilled outside Monday.

The once-highflying Alibaba-backed startup is in financial crisis after more than nine months with no fresh funds. Since September, Ofo has faced a flood of requests for user deposit refunds amid supplier lawsuits over unpaid bills. (Caixin)

3. First Bikes, Now Cars: Startups Struggle to Refund Deposits

Customers of yet another sharing service are having trouble getting their deposits back.

Users in Beijing, Shenzhen and Chengdu are having difficulty getting refunds from vehicle-sharing venture Togo, whose deposits amount to 1,500 yuan ($218).

The scandal comes as a surprise given that Togo had just announced in October that it had raised tens of millions of dollars in its latest round of fund raising. In addition to Togo, many other car-sharing services, such as that of online services giant Meituan, have been shuttered or sold off due to financial problems, according to previous media reports. (Caixin)

4. Foxconn Not in Settlement Talks With Qualcomm in Apple Battle

The lead attorney for the group of Apple Inc. device assemblers said the contract manufacturers are not in settlement talks with Qualcomm and are "gearing up and heading toward the trial" in April, Reuters reports. The group of contract manufacturers - which includes Foxconn parent Hon Hai Precision Industry Co Ltd, seeks at least $9 billion in damages from Qualcomm Inc.

Qualcomm sued the group last year, alleging they had stopped paying royalties related to Apple products, and Apple joined their defense. The contract manufacturers have since filed claims of their own against Qualcomm, alleging that Qualcomm’s practice of charging money for chips while also asking for a cut of the adjusted selling price of a mobile phone as a patent royalty is anticompetitive. (Reuters)

5. Chinese Province Asks Home-Sharing Platforms to Hand Over Guest and Host Info

China’s coastal Zhejiang province has launched a registration policy which requires home-sharing platforms to check, register and report to the Zhejiang Public Security Department on the location of apartments for rent as well as provide the name, contact and identity information of both apartment owners and guests.

The check-in and departure times of guests must also be reported.

The new policy comes amid rising concerns over potential public security challenges brought by the online home-sharing model. The policy claims to safeguard the operational safety of the home-sharing business as well as protect social order. (South China Morning Post)

6. Alibaba Sets Up Chipmaker

E-commerce titan Alibaba Group Holding Ltd. has officially registered its first chip-making unit with 10 million yuan ($1.4 million) of capital in Shanghai.

Alibaba currently holds stakes in domestic chipmakers including Cambricon, Barefoot Networks and Kneron. It spent an undisclosed amount in April to acquire Hangzhou-based chipmaker C-Sky Microsystems Co. Ltd.

The move, which was first announced in September, reflects a broader desire in China to reduce the nation’s dependence on foreign technology, especially on foreign-made semiconductors and memory chips. (Caixin)

7. JD’s Finance Unit in Shareholder Restructuring… or Not

The latest public records show that JD.com’s CEO Richard Liu has recently seen his personal stake drop in JD.D, previously known as JD Finance. The drop to 14.02% from a previous 16.67% is significant, because the latter figure was enough to make him the company’s biggest stakeholder. Liu stands accused of rape in a U.S. case dating back to August.

But following the reduction, the biggest single shareholder now becomes a limited partnership registered in Liu’s hometown of Suqian in east China’s Jiangsu Province. And guess who controls that partnership, which holds 16.13% of JD.D? Of course that would be Liu, who is the majority stakeholder. (Caixin)

Compiled by Hou Qijiang and Qian Tong