One of China’s biggest mobile gaming companies said it would sell gay dating app Grindr following rising tensions between Washington and Beijing over trade and national security.
Beijing-based Kunlun Tech said in a filing with the Shenzhen Stock Exchange in southern China that it would sell Grindr by June 30, 2020, as pressure mounts from US authorities concerned over the potential misuse of the app’s data by the Chinese government.
The news comes as China and the United States are locked in a tense trade war which includes a side skirmish in technology.
Grindr, which bills itself as ‘the world’s largest social networking app for gay, bi, trans and queer people,’ was founded in 2009 and says it has millions of users worldwide.
US officials feared that people with American security clearances who use the app could be blackmailed if China’s government demanded user data from Kunlun Tech, The Wall Street Journal reported in March, citing unnamed sources.
China has previously announced a strategy of achieving global dominance in high-tech fields like artificial intelligence and use of Big Data.
But that has raised US objections over Chinese state support for its tech players, as well as fears of advanced cyber-espionage by China.
The Chinese company was ordered to divest itself of Grindr by the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investments in sensitive industries or those deemed harmful to US national security.
Kunlun Tech’s exchange filing, submitted on Monday, said it signed an agreement on May 9 with US authorities regarding the sale.
The agreement restricts Kunlun Tech from accessing some of Grindr’s user information and from transferring sensitive data to people or entities within China.
Grindr is also required to stop all operations in China and must get CFIUS approval for three of its board members. In addition, one board must be an American citizen with US security clearance.
‘If the company sells Grindr shares in the future, it will reduce potential political and policy risks that the company’s overseas operations face,’ Kunlun Tech’s filing said.
The company paid $93 million for a 60 percent stake in Grindr in 2016, completing the full acquisition two years later for another $152 million.
Founded in 2008 by Tsinghua University graduate Zhou Yahui, Kunlun also owns Xianlai Huyu, a Chinese mobile gaming company.
China announced Monday it would raise tariffs on $60 billion in US exports by next month, responding in kind to President Donald Trump’s decision last week to hike duties on hundreds of billions of dollars in Chinese merchandise.
However, US President Donald Trump left open the door for reconciliation, saying he expected a ‘fruitful’ meeting next month with his Chinese counterpart Xi Jinping at a Group of 20 summit in Japan.