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CFIUS Targets Chinese Metro Businesses For The National Security Effects

According to the US government, a gaming company from China that owns the gay dating app Grindr is supposedly being held as a security risk. In 2016, Beijing Kunlun Tech obtained around 60% stake in Grindr and the remaining was bought in 2018. The company has not yet cleared the allegations with the Committee on Foreign Investment agency located in the US or CFIUS that is entitled to analyze the national security effects of international investments in the US organizations. The Chinese firm, Kunlun, is planning to sell Grindr subsequent to the CFIUS assessment.

The issues CFIUS heaved are not yet clear but the US officials are sure that the China companies had helped the Chinese government spy in the past on users. The app has direct access to some personal user data such as HIV status, sexual fondness, and geolocation, which is a golden opportunity for hackers. There are other problems with the app such as the data can be used by rivals. The data are currently used as a weapon to exploit people or institutions. The US government has declared that it will take the necessary aggressive steps to protect its national security and nationals. The CFIUS forcing companies to shut down a deal is unusual but the most surprising is that Kunlun does not seem interested in clearing the deal with CFIUS.

Grindr’s way of handling the private data and location discovery of the users are the major concerns that have the company’s privacy practices being questioned. The US social media and tools market has the Chinese companies entering the business and expanding at a faster pace. The Chinese company Bytedance is the owner of the popular video-sharing app TikTok and similarly, the tech giant Tencent that funded $150 Million in Reddit this year is also China-based. The CFIUS similarly had earlier blocked Broadcom, Singapore-based chipmaker, from purchasing Qualcomm last year suggesting that it will make the semiconductor industry stronger and in turn help Chinese firms such as Huawei even though China had no role to play in the deal.