Amid mounting tensions between Washington and Beijing, the Chinese owner of Grindr will sell the popular gay dating app by June 2020 under an agreement with US officials, according to reports.
Beijing Kunlun Tech acquired a 60 percent stake in Grindr — which bills itself as “the world’s largest social networking app for gay, bi, trans and queer people” — in 2016 for $93 million.
The company said Monday it has reached an agreement that prohibits it from accessing information about Grindr’s users and requires the sale of the app before June 30, 2020, according to Bloomberg News.
The app also won’t be able to transmit any sensitive information to any entities based in China.
Kunlun Tech said it had agreed to a request by the Committee on Foreign Investment in the United States, a government committee that scrutinizes acquisitions of American companies for potential national security risks, Reuters reported.
Among the risks the committee considers is whether a deal gives foreigners access to sensitive information about American citizens.
The development is a rare example of the committee undoing an acquisition that has already been completed.
If Kunlun, which completed its acquisition of Grindr in January 2018, doesn’t manage to sell the app by June 2020, it would sign the app over to a trustee, under terms of the agreement with CFIUS.
The company took over Grindr through two separate deals without submitting the acquisition for the committee’s review.
CFIUS had asked Kunlun to divest the app, whose database includes private information such as a user’s location, messages and HIV status.
Kunlun, which was founded in 2008 by Tsinghua University graduate Zhou Yahui, has already been in talks with investment bank Cowen to solicit acquisition interest in Grindr, according to Reuters.
The company also agreed to keep Grindr’s headquarters in the US, to put at least two American citizens on its three-member board and to subject its board to approval by CFIUS.
“As government officials — including US military and intelligence services officers — may be Grindr users, the US government is right to be concerned about the possibility of a foreign government gaining access to the most intimate aspects of their lives,” Privacy International, a UK-based rights group, told CNN in a statement.
“However, it is equally concerning that Grindr users from any country and background are at the mercy of a government, be it the Chinese or the US government.”
