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By Reuters
Chinese gaming company Beijing Kunlun Tech Co Ltd announced on Monday that it had accepted the request of the Committee for Foreign Investment in the United States (CFIUS) to sell the popular gay dating app Grindr, thus setting a deadline to do it.
Kunlun's decision came after Reuters announced in March that CFIUS, an inter-agency government committee reviewing US business acquisitions to determine potential risks to national security, had asked Kunlun to hand over Grindr, whose Database contains personal information such as location, messages and HIV status.
This development is a rare and well-known example of CFIUS canceling an acquisition already completed. Kunlun acquired Grindr through two separate transactions between 2016 and 2018 without subjecting the acquisition to the CFIUS review.
The CFIUS has not revealed its specific concerns. However, the United States is increasingly examining application developers about the security of the personal data they manage, especially if it involves US military personnel or intelligence services.
Kunlun has previously worked with investment bank Cowen Inc to solicit interest in the Grindr acquisition, Reuters reported.
Kunlun said in a regulatory document that it would close Grindr's operations in China and would not send any sensitive user data to China, in order to address concerns about data privacy.
In addition, CFIUS has prohibited Kunlun from accessing Grindr's personal data and sending Grindr's data to individuals or entities in China.
Kunlun also agreed to retain Grindr's US headquarters, register at least two US citizens on its three-member board and submit its board for CFIUS approval.
Kunlun acquired a majority stake in Grindr in 2016 for $ 93 million. He bought the rest of the company in 2018.
His control of Grindr has 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 users' privacy under its Chinese owner.
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 Xianlai Huyu, a Chinese mobile gaming company.
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