What Do TikTok and Grindr Have in Common?

The Committee on Foreign Investment in the United States (CFIUS) serves as the primary regulatory mechanism for addressing national security concerns regarding foreign ownership of American technology companies. As of August 2020, the committee’s scrutiny of TikTok highlights a recurring pattern of intervention in cross-border acquisitions, particularly those involving Chinese entities. The central thesis posits that a forced divestiture of TikTok, similar to the precedent set by the dating app Grindr, is a more probable and legally viable outcome than an outright, technically complex ban on the application within the United States.

The CFIUS, an interagency body led by the Treasury Secretary, possesses the authority to review both proposed and completed transactions that result in foreign control of U.S. businesses. Historical data indicates that the committee’s involvement in China-related transactions has increased significantly in recent years. Notable examples include the 2019 mandate requiring Beijing Kunlun Tech to divest from Grindr due to security risks, and the 2017 blocking of Orient Hontai Capital’s acquisition of Applovin. These cases demonstrate the committee’s power to retroactively challenge acquisitions that were not initially submitted for oversight.

While the U.S. government has signaled a desire to restrict TikTok’s operations, the lack of a national-level firewall—unlike those utilized in India or China—makes a total ban difficult to enforce without significant legal challenges at the app store distribution level. Consequently, the CFIUS review process remains the most likely path for the government to force a change in ownership, effectively mitigating perceived national security risks while avoiding the logistical complexities of a total service prohibition.