Beijing Kunlun Tech acquired a 60% stake in Grindr – which describes itself as "the world's largest social networking program for gays, bi, trans and queer people" – in 2016, and expected to take the app publicly after completion of the acquisition last year.
However, these plans were examined by the Foreign Investments Committee of the United States (CFIUS), which operates foreign purchases of US businesses, "to determine the effect of such transactions on US national security."
On Monday, Kunlun said it had entered into an agreement with CFIUS to sell the app by June 30, 2020. Until then, Grindr does not want to send sensitive information to China, but it is not clear how it will be enforced.
Security concerns have previously led the app to implement privacy protection for users in countries where they are gay, can put them at risk.
Exposed Personal Information
Earlier, the US has blamed Chinese hackers for an attack on the Office of Personnel Management (OPM), mainly the US Government's Human Resources Department, which revealed personal data to millions of current and former federal employees. Experts said the hack could have been an attempt to build a gigantic database of US government workers for future espionage activity.
While CFIUS has not disclosed its reasons behind the Grindr decision, similar concerns may have been at stake. According to Chinese law on cyber security, businesses operating in the country must base their data there and claim concerns that the government can access it. Chinese companies also have a history of sharing data with the government, and are often legally obliged in cases where US officials would fight to force companies to hand over sensitive information.
"As government officials – including US military and intelligence officials – may be Grindr users, the US government has the right to be concerned about the possibility of a foreign government gaining access to the most intimate aspects of their lives," Privacy International , a British-based rights group, said in a statement. "However, it's also about Grindr users from any country and background being in favor of a government, be it the Chinese or the US government."
Grindr is just the latest case of growing US suspicion of Chinese activity on the coast, especially in terms of technology.
Since last year, Washington has been involved in a major legal and public relations battle with Chinese telecom giant Huawei, who wants to block it from both US and global markets over alleged national security issues, especially over the expansion of 5G networks.
In April, six retired US military leaders urged other countries to follow Washington's leadership and said they had "serious concerns about a future where a Chinese-developed 5G network was widely adopted by our allies and partners."
Grindr is also not the first app to face national security issues. Last year, Washington blocked a $ 1.2 billion purchase of Moneygram by Ant Financial, an online payment company owned by Alibaba billionaire Jack Ma.
In a statement, Moneygram's CEO Alex Holmes said the "geopolitical environment" changed significantly since we first announced the proposed the transaction with Ant Financial. "
This deal was blocked by CFIUS after Republican lawmakers Robert Pittenger and Chris Smith wrote that" If this transaction were to be approved, the Chinese government would have substantial access to and information on the financial markets and specific international consumer money streams … We have Don't afford to ignore well-coordinated Chinese investments that target our critical and financial infrastructure. "
Similar concerns were raised about Grindr by Democratic Senator Ron Wyden, according to a statement he gave to the New York Times.
" Last year, my office met a top officer from the Treasury Department to express my serious concerns about the national security risks associated with a Chinese company that buys Grindr, "Wyden said." It is time for the administration and CFIUS to assess the national security impact of foreign companies receiving large, sensitive trophies by Americans private data. "
Many in the privacy community will hope The case calls for a broader estimate of how much staff database holds users, whether based in the US or owned by US investors.
Concerns have increased in recent years due to issues around Facebook ( FB ) who still handles the fallout from the Cambridge Analytica scandal, where it was revealed that it was breaking The political consulting firm had obtained millions of users' personal information without their consent.
It was echoing that scandal this month, when Facebook sued a South Korean company for alleged misuse of data to "create and sell advertising and marketing analytics and models."
Fitness apps, smart TVs and children's games have all met privacy and security scandals in recent years, as users and regulators are pushing back against companies that lift personal data reams to sell to advertisers and other companies.
In the EU, this has resulted in sweeping new privacy legislation, and there have been calls for US lawmakers to follow. Others, including Facebook co-founder Chris Hughes this week, have said big technology needs breaking up to protect users.