US government ‘backtracks on Grindr national security concerns’


grindr
Photo: Grindr

The Chinese owner of Grindr will proceed with an initial public offering (IPO) of the app, after a US national security panel dropped opposition to the plan.

In March, the US government’s Committee on Foreign Investment in the United States (CFIUS) opposed Beijing Kunlun Tech Co’s (BKT) continued ownership of the gay dating app. The CFIUS reviews international business deals for potential national security concerns.

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But on June 30, BKT told the Shenzen Stock Exchange that CFIUS had withdrawn their objections and Grindr would be floated on a stock exchange outside China, Reuters reported.

BKT had already undertaken to eventually float the asset. CFIUS never made their objections public, and now it appears that the proposed public listing of Grindr is back on.

A quick history

Beijing Kunlun Tech Co is one of China’s largest gaming companies. In 2016, BKT acquired a majority stake in California-based Grindr for US$93 million. Last year, BKT bought the rest of the company.

Late in 2018, BKT announced it planned to publicly list the business. But the CFIUS raised objections, reportedly on national security grounds.

Reuters earlier reported that BKT gave some of its Beijing-based engineers access to the personal information of millions of Americans.

Last year, security researchers also claimed Grindr had passed users’ personal data, including HIV status, to two third-party app companies.

Grindr said it has never sold information to third parties and users remain in control of all information they choose to share.

Since 2016, regulatory filings from the Chinese company show user numbers have quadrupled. In 2017, Grindr had 27 million registered users globally.

So what does it mean?

BKT will, almost certainly, profit handsomely from the sale.

The company has a spectacularly successful track record of acquiring and selling technology assets. BKT management swooped on a successful LGBTIQ-focused business and will clean up selling it back into the market.

But app users, whose private information is at the core of such businesses, may not know what happens to their information.

Imagine a closeted man who is also a high profile politician or born again Christian or Muslim cruising for trade on Grindr. In some circumstances, such a fellow could unwittingly be at risk of personal blackmail.

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US senators Ed Markey and Richard Blumenthal said earlier this year in the wrong hands, data collected by Grindr could be misused.

“This application serves uniquely vulnerable groups and collects highly sensitive information, including HIV status and sexual orientation,” they said.

“In the wrong hands, this information can be misused in ways that threaten… LGBTQ users around the world.

“[Especially] when there is a risk of adversarial foreign actors being privy to the data in question.”

A Grindr spokesperson said the company “never disclosed any user data (regardless of citizenship) to the Chinese government nor do we intend to.”

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