DIGITAL LIFE

Chinese owners of Grindr have had access to user data for months

In March, Canaltech reported on the possible sale of Grindr, a gay-oriented dating app that is now owned by Chinese company Kunlun Tech. At the time, concerns were raised by the US Foreign Investment Committee (CFIUS) that the company, which gained access to the application user database, could misuse this sensitive information.
Yesterday (27), Reuters news agency reported that the issue is still under discussion, but that the "cause" is much longer than it initially seemed: according to eight sources - all former employees who worked in the app - after taking full control of Grindr in January 2018, Kunlun Tech began an "app-enhancement" process, asking its engineers and developers to identify points where Grindr could be improved. In the middle of this research, the Chinese company obtained such access to the database.
No evidence of misuse of the information was found, according to Reuters, but the company was knowingly given the decision to give this access to its engineers in Beijing, where it is based, which proved to be a misleading maneuver that brought the attention of CFIUS and subsequent sales orders of the app - which has not yet happened. In March, Kunlun Tech was already looking for American investors to promote the sale. However, the Reuters note shows that, "underneath the cloths," the Chinese company is still trying to save its business.
"The CFIUS operates under the assumption that, whether through illegal or legal means, Chinese intelligence agencies could readily access information stored by Chinese private companies if they wanted to," said Rod Hunter, a lawyer at Baker & McKenzie LLP. worked as a CFIUS process review manager during the administration of former President George W. Bush.
According to him, the fear with the acquisition is that Chinese companies and government have to determine whether Grindr is used, for example, by US government officials or members of the US military. In official positioning, China's Foreign Ministry said it was aware of the situation with Grindr and urged the United States to allow fair market competition and not to polemize economic mishaps.
"The Chinese government always encourages Chinese companies to conduct economic and commercial cooperation abroad in accordance with international standards and local laws," the statement said.
Kunlun Tech promoted the acquisition of Grindr on two occasions: in 2016 the company acquired 60% of the application, completing the other 40% in January 2018. This second acquisition formalized the departure of Grindr CEO and founder Joel Simkhai. At the same time, application development processes migrated from West Hollywood, where it was the headquarters of the app when in American hands, to Beijing. Little by little, officials and outsourcers from the West were dismissed or resigned, all of which culminated in the transfer of most of the cases to Beijing. Some American remnants, at the time, raised concerns about user data usage and privacy, but the new management said there was no cause for concern.
Adding suspicions, Kunlun Tech began separating Grindr from itself, sort of forming a new company, transferring employees to it, and even renting corporate space (which would be dropped months later). A CFIUS analysis panel asked Kunlun Tech, who also owns AppLovin 'and part of the Opera browser, to sell Grindr back to an American company or investor.
In March, the company announced its search for investors. But one Reuters source said Grindr's ownership of the Chinese had been championed by them until last week. Now, the official position is that Kunlun Tech will sell the application until June 2020.
Grindr has about 4.5 million active daily users. Source: Canaltech via Reuters