Kunlun in China talks with the United States about Grindr: filing

(Reuters) – Chinese gaming company Beijing Kunlun Tech Co Ltd. said on Monday it had begun talks with US government officials whether it should continue to own the popular Grindr LLC gay dating app.

Reuters announced last week that the US Committee on Foreign Investment (CFIUS), a US government group charged with reviewing transactions for national security risks, had asked Kunlun to sell Grindr, under the impulse of concerns related to data privacy.

"We are in discussion with CFIUS right now. We have not entered into any agreement with the CFIUS on the day of the announcement. We will disclose any future development, "said Kunlun in a brief document filed by the China Securities Regulatory Commission.

This development represents a rare and prestigious example of CFIUS seeking to cancel an acquisition already completed. Kunlun took over Grindr under two separate agreements between 2016 and 2018 without subjecting the acquisition to the CFIUS review, making it vulnerable to such intervention, Reuters reported last week.

The CFIUS has not revealed its specific concerns. However, the United States is increasingly examining application developers about the security of personal data, particularly if some of them involve military personnel or US intelligence services.

Grindr collects personal information submitted by users, including the location, messages and, in some cases, even the HIV status of a person, in accordance with its privacy policy.

Kunlun said last August that it was preparing for an initial public offering (IPO) of Grindr.

Following the intervention of CFIUS, Kunlun turned more to an auction process to sell Grindr, as the IPO would have kept Grindr under control of Kunlun for longer, Reuters reported.

Kunlun's control of Grindr fueled the concerns of privacy advocates in the United States. US Senators Edward Markey and Richard Blumenthal sent a letter to Grindr last year asking for answers on how the application would protect the privacy of its Chinese owner's users.

Kunlun is one of China's largest mobile gaming companies. It was part of a buyout consortium that acquired the Norwegian Internet Navigation Company Opera Ltd for $ 600 million in 2016.

Founded in 2008 by Zhou Yahui, a graduate of Tsinghua University, Kunlun also owns Qudian Inc, a Chinese consumer credit provider, and Xianlai Huyu, a Chinese mobile phone gaming company.

Zhou said the foreign market was the root of Kunlun's business, accounting for 70% of Kunlun's revenue.