The Chinese owner of Grindr has announced that he has reached an agreement to resell the application of dating for homosexuals to an American firm, after pressure from the United States citing reasons of national security.
In a statement sent to the Shenzhen Stock Exchange, the online games specialist Kunlun Tech said that he had signed an agreement to resell his 98.59% in Grindr, for an amount of about 608.5 million dollars . The buyer is the American holding company San Vicente Acquisition LLC.
Grindr, an application founded in 2009, claims more than 4 million daily gay, lesbian, bisexual, transgender and queer (LGBTQ) users across the globe.
Fears of blackmailing American users
Kunlun Tech originally paid $ 93 million in 2016 to take 60% of Grindr. The company then rose to 100% of the capital in 2018, paying an additional $ 152 million. But this passage under the Chinese flag of the application had attracted the attention of a US federal agency.
Kunlun announced in May 2019 that it had signed an agreement with the Committee for Foreign Investment in the United States (CFIUS), under which it agreed to sell the application by June 2020 – but without explaining the reasons of the decision.
According to information reported a few months earlier by the Wall Street Journal, the CFIUS had ordered Kunlun to sell Grindr because of security concerns. This federal agency, responsible for examining the security consequences of the acquisitions of foreign groups in the United States, feared indeed that American users using the application would be victims of blackmail if the Chinese government required data (sexual orientation, seropositivity. ..) at Kunlun Tech.
An investigation into the acquisition of TikTok
According to the WSJ, the CFIUS was particularly worried about a Chinese law of 2017 which requires companies in the country to cooperate with the intelligence services. The sale of Grindr also comes at a time when concerns are mounting in several Western countries about the protection of the data of users of the application.
The Norwegian Consumers Council accused Grindr in mid-January of sharing the GPS data, IP address, age and sex of its users with a multitude of players concerned with better targeting their advertisements: sharing deemed illegal and ” an insane violation of the European rights of confidentiality of the users “, according to him.
The sale to San Vicente Acquisition LLC must now be approved by the CFIUS, said Kunlun in his press release. Some 1.4% of the shares, now in the hands of managers and employees of Grindr, are not affected by the transaction announced on Saturday.
According to several American media, the CFIUS has also opened a national security investigation into the Chinese giant’s takeover of the internet ByteDance from TikTok, a video sharing application popular with teenagers around the world.
–