China tech firm to sell gay dating app Grindr for $608 million

BEIJING — One of China's biggest mobile gaming companies is selling popular gay dating app Grindr for $608 million after pressure from US authorities concerned over the potential misuse of user data. 

National security officials in Washington fear the platform -- which bills itself as the world's largest social networking space for LGBT people -- could be used by the Chinese government to blackmail Americans with government security clearances, according to media reports last year.

Beijing Kunlun Tech took a majority stake in the app in 2016 and bought the remaining equity two years later for a combined $245 million, but was reportedly ordered to relinquish the platform by US officials last year.

It will sell a 98.59 percent stake in Grindr to San Vicente Acquisition, a holding company based in the US state of Delaware, according to a company filing with the Shenzhen Stock Exchange on Friday. 

The deal is awaiting approval from a US committee authorized to review transactions involving foreign investments, the filing said. 

Grindr has faced other accusations of improperly managing the data under Beijing Kunlun's ownership.

The platform violated European Union privacy regulations by sharing the GPS data, age and gender of its users with third-party companies to help target advertisements, according to a report by a Norwegian consumer rights group.

Agence France-Presse 

Grindr, Tinder spread personal details, study says

Popular dating services like Grindr, OkCupid and Tinder are spreading user information like dating choices and precise location to advertising and marketing companies in ways that may violate privacy laws, according to a new report that examined some of the world’s most downloaded Android apps.

Grindr, the world’s most popular gay dating app, transmitted user-tracking codes and the app’s name to more than a dozen companies, essentially tagging individuals with their sexual orientation, according to the report, which was released Tuesday by the Norwegian Consumer Council, a government-funded nonprofit organization in Oslo.

Grindr also sent a user’s location to multiple companies, which may then share that data with many other businesses, the report said. When The New York Times tested Grindr’s Android app, it shared precise latitude and longitude information with 5 companies.

The researchers also reported that the OkCupid app sent a user’s ethnicity and answers to personal profile questions — like “Have you used psychedelic drugs?" — to a firm that helps companies tailor marketing messages to users. The Times found that the OkCupid site had recently posted a list of more than 300 advertising and analytics “partners” with which it may share users’ information.

“Any consumer with an average number of apps on their phone — anywhere between 40 and 80 apps — will have their data shared with hundreds or perhaps thousands of actors online,” said Finn Myrstad, the digital policy director for the Norwegian Consumer Council, who oversaw the report.

The report, “Out of Control: How Consumers Are Exploited by the Online Advertising Industry,” adds to a growing body of research exposing a vast ecosystem of companies that freely track hundreds of millions of people and peddle their personal information. This surveillance system enables scores of businesses, whose names are unknown to many consumers, to quietly profile individuals, target them with ads and try to sway their behavior.

The report appears just two weeks after California put into effect a broad new consumer privacy law. Among other things, the law requires many companies that trade consumers’ personal details for money or other compensation to allow people to easily stop the spread of their information.

In addition, regulators in the European Union are stepping up enforcement of their own data protection law, which prohibits companies from collecting personal information on religion, ethnicity, sexual orientation, sex life and other sensitive subjects without a person’s explicit consent.

The Norwegian group said it planned to file complaints Tuesday asking regulators in Oslo to investigate Grindr and 5 ad tech companies for possible violations of the European data protection law. A coalition of consumer groups in the US said it was also sending letters to American regulators, including the attorney general of California, urging them to investigate whether the companies’ practices violated federal and state laws.

In a statement, the Match Group, which owns OkCupid and Tinder, said it worked with outside companies to assist with providing services and shared only specific user data deemed necessary for those services. Match added that it complied with privacy laws and had strict contracts with vendors to ensure the security of users’ personal data.

In a statement, Grindr said it had not received a copy of the report and could not comment specifically on the content. Grindr added that it valued users’ privacy, had put safeguards in place to protect their personal information and described its data practices — and users’ privacy options — in its privacy policy

The report examines how developers embed software from ad tech companies into their apps to track users’ app use and real-life locations, a common practice. To help developers place ads in their apps, ad tech companies may spread users’ information to advertisers, personalized marketing services, location data brokers and ad platforms.

The personal data that ad software extracts from apps is typically tied to a user-tracking code that is unique for each mobile device. Companies use the tracking codes to build rich profiles of people over time across multiple apps and sites. But even without their real names, individuals in such data sets may be identified and located in real life.

For the report, the Norwegian Consumer Council hired Mnemonic, a cybersecurity firm in Oslo, to examine how ad tech software extracted user data from 10 popular Android apps. The findings suggest that some companies treat intimate information, like sexual orientation or drug habits, no differently from more innocuous information, like favorite foods.

Among other things, the researchers found that Tinder sent a user’s gender and the gender the user was looking to date to two marketing firms.

The researchers did not test iPhone apps. Settings on both Android phones and iPhones enable users to limit ad tracking.

The group’s findings illustrate how challenging it would be for even the most intrepid consumers to track and hinder the spread of their personal information.

Grindr’s app, for instance, includes software from MoPub, Twitter’s ad service, which can collect the app’s name and a user’s precise device location, the report said. MoPub in turn says it may share user data with more than 180 partner companies. One of those partners is an ad tech company owned by AT&T, which may share data with more than 1,000 “third-party providers.”

In a statement, Twitter said: “We are currently investigating this issue to understand the sufficiency of Grindr’s consent mechanism. In the meantime, we have disabled Grindr’s MoPub account.”

AT&T did not immediately respond to a request for comment.

The spread of users’ location and other sensitive information could present particular risks to people who use Grindr in countries, like Qatar and Pakistan, where consensual same-sex sexual acts are illegal.

This is not the first time that Grindr has faced criticism for spreading its users’ information. In 2018, another Norwegian nonprofit group found that the app had been broadcasting users’ HIV status to 2 mobile app service companies. Grindr subsequently announced that it had stopped the practice.

The report’s findings also raise questions about the extent to which businesses are complying with the new California privacy law. The law requires many companies that benefit from trading consumers’ personal details to prominently post a “Do Not Sell My Data” option, allowing people to stop the spread of their information.

But Grindr’s stance challenges that idea. By agreeing to its policy, its site says, users “are directing us to disclose” their personal information “and, therefore, Grindr does not sell your personal data.”

Myrstad said many consumers were comfortable sharing their data with apps they trusted. “But this study clearly shows that many apps abuse that trust,” he said. “Authorities need to enforce the rules we have, and if they are not good enough, we have to make better rules.”


2020 The New York Times Company

source: news.abs-cbn.com

China's Beijing Kunlun to revisit Grindr IPO

HONG KONG/NEW YORK - Chinese gaming company Beijing Kunlun Tech Co Ltd said on Monday it would revive plans for an initial public offering (IPO) of popular gay dating app Grindr Inc, after a U.S. national security panel dropped its opposition to the plan.

Kunlun said in May it had agreed to a request by the Committee on Foreign Investment in the United States (CFIUS) to sell Grindr, setting a June 2020 deadline to do so and putting preparations for an IPO of Grindr on hold.

A source familiar with the matter said on Monday that Kunlun's efforts to sell Grindr outright were continuing even as the IPO preparations were relaunched.

A Grindr spokeswoman declined to share more information about the IPO plans. Kunlun did not respond to requests for comment. The U.S Treasury Department, which chairs CFIUS, did not immediately respond to a request for comment.

CFIUS has not disclosed its concerns about Kunlun's ownership of Grindr. However, the United States has been increasingly scrutinizing app developers over the safety of personal data they handle, especially if some of it involves U.S. military or intelligence personnel.

Reuters reported in May that Kunlun had given some Beijing-based engineers access to the personal information of millions of Americans, including private messages and HIV status.

Kunlun said in May it would shut down Grindr’s China operations and would not send any sensitive user data to China, in an effort to address concerns over data privacy.

Grindr will be listed on a stock exchange outside China, with the timing of the move to be decided according to overseas capital market conditions, Kunlun said in a filing to the Shenzhen stock exchange on Monday.

Kunlun is one of China's largest mobile gaming companies. It acquired a majority stake in Grindr in 2016 for $93 million and bought out the remainder of the company in 2018. It did so without submitting the transactions for CFIUS review.

Kunlun's control of Grindr has fueled concerns among privacy advocates in the United States. Democratic U.S. Senators Edward Markey and Richard Blumenthal sent a letter to Grindr last year demanding answers about how the app would protect users’ privacy under its Chinese owner.

source: news.abs-cbn.com

Told US security at risk, Chinese firm seeks to sell Grindr dating app

Chinese gaming company Beijing Kunlun Tech Co Ltd is seeking to sell Grindr LLC, the popular gay dating app it has owned since 2016, after a US government national security panel raised concerns about its ownership, according to people familiar with the matter.

The Committee on Foreign Investment in the United States (CFIUS) has informed Kunlun that its ownership of West Hollywood, California-based Grindr constitutes a national security risk, the two sources said.

CFIUS' specific concerns and whether any attempt was made to mitigate them could not be learned. The United States has been increasingly scrutinizing app developers over the safety of personal data they handle, especially if some of it involves US military or intelligence personnel.

Kunlun had said last August it was preparing for an initial public offering (IPO) of Grindr. As a result of CFIUS' intervention, Kunlun has now shifted its focus to an auction process to sell Grindr outright, given that the IPO would have kept Grindr under Kunlun's control for a longer period of time, the sources said.

Grindr has hired investment bank Cowen Inc to handle the sale process, and is soliciting acquisition interest from US investment firms, as well as Grindr's competitors, according to the sources.

The development represents a rare, high-profile example of CFIUS undoing an acquisition that has already been completed. Kunlun took over Grindr through two separate deals between 2016 and 2018 without submitting the acquisition for CFIUS review, according to the sources, making it vulnerable to such an intervention.

The sources asked not to be identified because the matter is confidential.

Kunlun representatives did not respond to requests for comment. Grindr and Cowen declined to comment. A spokesman for the US Department of the Treasury, which chairs CFIUS, said the panel does not comment publicly on individual cases.

Grindr, which describes itself as the world's largest social networking app for gay, bisexual, transgender and queer people, had 27 million users as of 2017. The company collects personal information submitted by its users, including a person's location, messages, and in some cases even someone's HIV status, according to its privacy policy.

CFIUS' intervention in the Grindr deal underscores its focus on the safety of personal data, after it blocked the acquisitions of US money transfer company MoneyGram International Inc and mobile marketing firm AppLovin by Chinese bidders in the last two years.

CFIUS does not always reveal the reasons it chooses to block a deal to the companies involved, as doing so could potentially reveal classified conclusions by US agencies, said Jason Waite, a partner at law firm Alston & Bird LLP focusing on the regulatory aspects of international trade and investment.

"Personal data has emerged as a mainstream concern of CFIUS," Waite said.

The unraveling of the Grindr deal also highlights the pitfalls facing Chinese acquirers of US companies seeking to bypass the CFIUS review system, which is based mostly on voluntary deal submissions.

Previous examples of the US ordering the divestment of a company after the acquirer did not file for CFIUS review include China National Aero-Technology Import and Export Corporation's acquisition of Seattle-based aircraft component maker Mamco in 1990, Ralls Corporation's divestment of four wind farms in Oregon in 2012, and Ironshore Inc's sale of Wright & Co, a provider of professional liability coverage to US government employees such as law enforcement personnel and national security officials, to Starr Companies in 2016.

PRIVACY CONCERNS

Kunlun acquired a majority stake in Grindr in 2016 for $93 million. It bought out the remainder of the company in 2018.

Grindr's founder and chief executive officer, Joel Simkhai, stepped down in 2018 after Kunlun bought the remaining stake in the company.

Kunlun's control of Grindr has fueled concerns among privacy advocates in the United States. US senators Edward Markey and Richard Blumenthal sent a letter to Grindr last year demanding answers with regards to how the app would protect users' privacy under its Chinese owner.

"CFIUS made the right decision in unwinding Grindr’s acquisition. It should continue to draw a line in the sand for future foreign acquisition of sensitive personal data," Markey and Blumenthal said in a statement on Wednesday.

Kunlun is one of China's largest mobile gaming companies. It was part of a buyout consortium that acquired Norwegian internet browser business Opera Ltd for $600 million in 2016.

Founded in 2008 by Tsinghua University graduate Zhou Yahui, Kunlun also owns Qudian Inc, a Chinese consumer credit provider, and Xianlai Huyu, a Chinese mobile gaming company.

source: news.abs-cbn.com

Gay dating app Grindr scorched for handling of HIV data

SAN FRANCISCO - Gay dating app Grindr was under fire on Monday for sharing information about users' HIV status or locations with two companies enlisted to optimize its software.

Grindr chief technology officer Scott Chen said in a Tumblr post that sharing data with partners such as Apptimize and Localytics was "industry practice" and that steps were taken to protect people's privacy.

"As a company that serves the LGBTQ community, we understand the sensitivities around HIV status disclosure," Chen said.

"Our goal is and always has been to support the health and safety of our users worldwide."

Grindr users have the option of sharing their HIV status and when they were most recently tested.

Researchers worried that including the health information with other data such as location and email address could result in people being identified.

Online rights champion Electric Frontier Foundation called Grindr's response "disappointing."

The Los Angeles-based company said that it uses Apptimize and Localytics to test and validate its platform, and that data it shares with them could include users' HIV status or location fields.

Sensitive data is encrypted when sent, and vendors are under strict contractual terms to keep it secure and confidential, according to Chen.

Norwegian nonprofit research group SINTEF uncovered the data sharing, and concern spread in the US after Buzzfeed reported the findings.

"Grindr has never, nor will we ever sell personally identifiable user information –- especially information regarding HIV status or last test date -– to third parties or advertisers," Chen said.

He noted though that Grindr is a public platform, and that should be kept in mind when deciding what to put in profiles.

News website Axios reported that Grindr's security chief said the company has stopped sharing users' HIV status with its third-party vendors.

"You guys should just close up now," read one of the few comments in an online chat forum under the Grindr post at Tumblr.

"No one cares about your efforts or industry standards. You betrayed the LGBT community in more than just the one way."

gc/oh

source: news.abs-cbn.com

Chinese firm buys majority of gay dating app Grindr

BEIJING - A Chinese gaming firm has bought a controlling stake in the hugely popular US gay dating app Grindr, despite homosexuality remaining a sensitive subject in the Asian giant.

Grindr, which calls itself "the largest network for gay men in the world", has millions of users globally. It is renowned for facilitating hook-ups, helping potential partners connect via photos, messaging and location details.

Its search criteria include body type, ethnicity or "Tribe": Bear, Clean-Cut, Daddy, Discreet, Geek, Jock, Leather, Otter, Poz, Rugged, Trans or Twink.

Beijing Kunlun Tech's soared 10 percent -- their daily limit -- on the Shenzhen stock exchange on Tuesday after it announced the $93 million deal.

Grindr is already available in China, and in a statement to the exchange Kunlun Tech -- one of China's biggest designers and operators of online games -- suggested it might be interested in the company as much for its networking technology, as for its particular niche specialisation.

"This investment in a social networking platform will further improve the company's strategic layout in the global Internet market," the statement said.

It added that its own experience operating Internet products in overseas markets, such as games, would help Grindr's business grow.

Los Angeles-based Grindr was founded in 2009 and the gay dating application -- versions of which are tailored for Apple or Android devices -- says it has more than two million daily active users in 196 countries.

Its 10 most active territories do not include China, where it competes with other foreign gay dating apps such as Jack'd as well as hugely popular homegrown options such as Blued and Zank, which sport interfaces similar to their international counterparts.

Blued says its app has been downloaded by 17 million users in mainland China, and another five million overseas.

- 'Vote of confidence' -China only officially decriminalised homosexuality in 1997, and listed it as a mental illness for another four years.

More recently tolerance has grown in larger Chinese cities, but conservative attitudes remain deeply engrained and discrimination against gays and lesbians is common.

In a company blog post, Grindr founder and chief executive Joel Simkhai touted the investment as "a huge vote of confidence in our vision to connect gay men to even more of the world around them".

The six-year-old start-up agreed to the purchase to accelerate growth and improve the mobile application for its users, according to Simkhai.

Simkhai founded Grindr with his own money and said it was the first time the firm had sold shares to an outside investor.

The deal -- which is subject to US anti-trust approval -- is for a 60 percent stake in Grindr, and Kunlun Tech will appoint three of the five members the US app's board, including its billionaire head Zhou Yahui, who will become its chairman.

Tuesday's share price jump took Kunlun Tech's market capitalization to 1.13 billion yuan ($170 million).

source: www.abs-cbnnews.com