Video Games

Epic and Riot Games’ Tencent dealings draw U.S. government scrutiny

The Trump administration wants to know more about U.S. video game companies’ involvement with China’s Tencent Holdings, whose relationships with American firms includes full ownership of Riot Games, a significant minority stake in Epic Games, and publishing deals with Activision Blizzard.

Bloomberg reported on Thursday that the Committee on Foreign Investment in the United States (CFIUS) sent letters to Epic, Riot, and others to ask about their protocols for securely handling Americans’ personal information.

Tencent is the world’s largest video game vendor, but its U.S. holdings are not limited to just that marketplace. It also has stakes in Reddit, Discord, and Snapchat maker Snap Inc.

In August, the Trump administration also threatened to ban the Tencent-made WeChat messaging app. More details about the executive order Tencent faces there are expected around Sept. 20.

The latest CFIUS inquiry follows the Trump administration’s ultimatum to ByteDance, the Chinese owners of the social media platform TikTok, to sell that app to a U.S. company or face banishment from the American marketplace. Over the past six weeks, ByteDance has tried to craft a resolution that, at the latest, involves bringing on Oracle as a data-handling partner.

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The Trump administration, calling TikTok’s Chinese ties a threat to national security, took its actions under emergency powers Congress created in 1977. ByteDance sued the U.S. government in late August, alleging that the administration’s actions have deprived it of due process.

CFIUS scrutinizes acquisitions of American companies for risks to the national security. Established in 1975, Congress in 1988 gave the committee the power to reject deals involving the foreign acquisition or holding of critical infrastructure. The Treasury Department chairs CFIUS.

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