After a US government national security panel raised concerns about its ownership, Grindr’s owners are allegedly being pressured to sell it.
As a result, Chinese gaming company Beijing Kunlun Tech Co Ltd is allegedly seeking to sell Grindr LLC, the popular gay dating app it has owned since 2016.
This followed the Committee of Foreign Investment in the United States (CFIUS) informing Kunlun its owning of the West Hollywood app constitutes a national security risk, sources told Reuters in a report published today (27 March).
Gay Star News reached out to Grindr for comment.
What’s the push to divest about?
The CFIUS review certain transactions involving foreign investment in the US to determine if they will impact national security.
As Grindr, based in the US, was bought by a Chinese company, the CFIUS could have reviewed the acquisition.
While they do deal mainly with voluntary submissions, Kunlun allegedly did not submit a review altogether.
It’s unclear what the CFIUS is concerned about exactly. Many app developers in the US are facing scrutiny over how they handle personal data.
Grindr is an app that deals with everything from people’s HIV status to their current location.
‘Personal data has emerged as a mainstream concern for CFIUS,’ said Jason White, a partner at law firm Alston & Bird LLP.
He told Reuters the CFIUS does not always reveal why they block a deal, as doing so allegedly could be a security risk.
Last year, Kunlun said it was preparing for a public offering of Grindr.
But, as a result of the CFIUS’ intervention, Kunlun said it will now opt for an auction process to sell Grindr outright.
Behind the scenes
According to Reuters’ sources, Kunlun took over Grindr through two separate deals between 2016 and 2018.
However, they did not submit the acquisition for CFIUS review.
This effectively invites the committee to take action.