A person looks at the Grindr app in the App Store on a phone in Los Angeles on March 27, 2019. - A ... [+]
A year after U.S. officials expressed extreme security concerns over one of the world’s largest LGBT social platforms, Grindr’s Chinese owner Kunlun Tech has sold the app for more than $600 million. The threat of China using sensitive data harvested by its tech companies against U.S. citizens was the main reason for the sale. This move begs the question of whether or not a dating app could actually threaten national security?
The Breakdown You Need To Know: With more than 3 million daily active users, Grindr keeps a lot of social data on them. The hookup app’s privacy policy notes they collect a wide range of personal data including location information, messages, and even HIV status if users choose to provide it. One of the most exposed groups is likely black gay and bisexual men, because in 2017 they accounted for the largest number of HIV diagnoses at 9,807, followed by Hispanic with 7,436 and whites at 6,982, according to the Centers for Disease Control and Prevention. Also, the Committee on Foreign Investment in the U.S (CFIUS) was concerned Grindr’s users may include U.S. officials and military personnel.
CultureBanx noted the main problem for CFIUS was that Grindr had violated data protection laws. They claimed the platform was sharing information on sexual preferences and HIV-status to third parties without proper consent and is forcing Kunlun to sell Grindr.
Dating Faux Pas: When Kunlun agreed in a filing earlier this month to swipe right and sell its 99% stake to San Vicente Acquisition for about $608.5 million, it brought an end to a year of uncertainty over the ownership of Grindr, according to Bloomberg. Kunlun first bought a majority stake in Grindr in a series of purchases for just $93 million in 2016, and acquired the remaining shares two years later. The Financial Times found that during the first three months of 2019 Grindr’s total revenues were Rmb 553 million ($77.9 million).
In general the government is continuing to give a side-eye to Chinese investment in U.S. tech companies. Back in 2016, China invested $18.7 billion U.S. tech firms, that number dropped drastically in 2018 to $2.2 billion, perhaps due to heightened CFIUS scrutiny.
It’s unclear why the government group has intervened in the Grindr arrangement, since they have an almost non-existent track record of doing this in other situations. When we look at history, between 1975 - 2011, they only blocked one deal. If we don’t count the Grindr tie up, CFIUS has helped block four deals since 2012, clearly a huge uptick. The deal needs the approval from CFIUS, the group that originally required the Chinese firm to unwind its purchase of Grindr.
What’s Next: It’s imporant to note that Grindr has not always been a safe space for all gay men. Profiles have been known to list turn-offs like “No blacks” or “Sorry, not into blacks” among other racist things. The platform has attempted to better police the app’s rampant racism and harmful behavior through its Kindr anti-bullying initiative.
