The Committee on Foreign Investment in the US (CFIUS) is forcing Grindr’s current owner, a Chinese company called Kunlun, to sell the popular dating app for gay and non-gender-conforming people because its ownership poses a national security risk.
Now Grindr, which has dealt with similar controversies in the past, is back on the market for a new owner — and it’s looking for a match fast.
Grindr’s rocky relationship
Kunlun sealed a $245m deal to purchase Grindr, an attractive acquisition target with 3.3m daily users, in 2018 after going steady with the company as a majority stakeholder since 2016.
But Grindr-Kunlun’s honeymoon phase ended quickly in 2016 when a researcher showed that users’ location data might be insecure. Grindr later came under fire for exposing users’ HIV statuses with 3rd parties and exposing their precise locations.
Now, since the US would have no way to protect Americans’ data if the Chinese government decided to seize it from Kunlun, regulators ordered Kunlun to dump Grindr.
A warning for Chinese investors to stay out of American pants
Usually, the CFIUS objects at the altar, preventing partnerships before their unions are finalized. But this time, the committee chose to send a message instead of forever holding its peace.
By breaking up a pair of full-fledged partners, the CFIUS will continue to tighten its tolerance for lazy data management by breaking up businesses.
After Facebook and dozens of other companies demonstrated the dangers of data, regulators are starting to pay attention to companies that devour American data — taking steps to ensure Americans can swipe right without fear.
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