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Tencent Investment to Rakuten is National Security Threat?

After Rakuten’s announcement of issuance of new shares to Tencent group (Chinese company), many Japanese are wondering how it could happen under Japanese foreign investment regulations.

The transaction is not just a Japanese national security issue, but a U.S. issue too, because Rakuten is expanding e-commerce business in the U.S., which allows Rakuten to collect U.S. citizens’ personal data. 

According to Kyodo News, the Japanese and U.S. government are jointly monitoring Rakuten Group.  But people are not sure how effective the mere monitoring is.

After FIRRMA expanded the scope of the covered transaction, CFIUS also cares about investments that causes a foreign company to obtain U.S. citizens’ sensitive personal data.  I believe that Rakuten can collect U.S. citizens’ sensitive personal data through their e-commerce business in the U.S.

The following is the announcement of Rakuten. 

Announcement of Issuance of New Shares and Disposal of Treasury Stock through Third-Party Allotment | Rakuten Group, Inc.

The Japanese and U.S. governments are planning to jointly monitor e-commerce giant Rakuten Group Inc. for fear of customer data falling into the hands of Chinese authorities, sources with knowledge of the matter said Tuesday.


japan, international, rakuten, national security, cfius, foreign investment