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Why did the U.S. order a Chinese company to sell Grindr?

Is Grindr a national security threat?
  • The Committee on Foreign Investment in the United States has ordered a Chinese gaming company to sell gay dating app Grindr
  • U.S. officials are concerned that personal data collected from the app could be used to blackmail government officials with security clearances

A U.S. government panel focused on national security raised eyebrows when it ordered a Chinese company to sell gay dating app Grindr. The concern: That the Chinese government could use personal data on the app to blackmail American officials, the Wall Street Journal reported.

Beijing Kunlun Tech Co. bought a majority stake in Grindr in 2016 and took full control of the company last year. The Committee on Foreign Investment in the United States, which reviews acquisitions of U.S. companies by non-U.S. players for their potential impact on national security, only this week moved to block the deal.

Experts point to growing concerns around data privacy, along with tense U.S. trade relations, as the reasons for CFIUS' intervention.

"You have to treat this as a U.S. reaction to Chinese businesses having access to personal communications more than anything else," said Bart Lazar, a lawyer with Seyfarth Shaw who specializes in data privacy.

Another China deal dinged

Last year, CFIUS also blocked Chinese Ant Financial's $1.2 billion acquisition of U.S. money transfer company MoneyGram, a high-profile merger that dealt a blow to Alibaba chairman Jack Ma, who owns Ant Financial. CFIUS cited data privacy risks for U.S. citizens in halting the deal.

Still, many Chinese companies have bought or invested in American business in recent years. Such deall aren't necessarily nefarious, Klint Finley, a Wired contributor, told CBSN. "There isn't an established link between Chinese companies and spying. These are concerns, not proven instances."

Grindr said it had no comment on the U.S. order. Covington and Burling, a law firm based in Washington, D.C., also declined comment, saying it is involved in the case.

A spokesperson with the Treasury Department, which heads CFIUS, said in a statement that the committee is barred by law from publicly disclosing information filed with the panel.

"Blackmailer's goldmine"

Grindr doesn't collect different user data than other social networking apps, like Tinder, but it has drawn fire for its privacy practices. The company, which had 27 million users on its platform as of 2017, last year was discovered to have shared users' HIV status and sexual preferences with third parties.

Grindr also tracks email addresses, passwords, billing information, geolocations, and device IDs and IP addresses, as well as messages exchanged with other users and photographs. 

"I don't think we'll have an Anthony Weiner-type situation," Lazar said. "But people do, when they believe that they're in a private means of communication, they do open up and provide more information to an app than you might think is rational."

Grindr could also be used to identify, for example, government and military personnel who could be pressured to reveal state secrets if they shared sensitive information on the app.

"It could be a blackmailer's goldmine, essentially, if this information were to fall into the hands of an adversarial government," Finley said.