The US government is reportedly investigating Chinese tech giant Tencent and the US gaming companies in which it has an investment stake. Bloomberg reports that the Treasury Department’s Committee on Foreign Investment in the US (CFIUS) has asked companies, including Epic Games and Riot Games, to answer questions about their data security standards, according to “people familiar with the matter.” .
CFIUS has the authority to investigate foreign investments in U.S. companies when those investments could have an impact on national security. Historically, that often meant investigating foreign access to U.S. natural resources or military secrets. More recently, however, CFIUS has become more interested in potential foreign access to US customer data.
“If you’re talking massive amounts of data, there’s probably something for the committee to look at,” former deputy secretary of the Treasury Department, Aimen Mir, told Bloomberg yesterday. “The question then becomes, is the risk so high that it actually justifies deals being pulled apart?”
CFIUS’s investigation comes amid the Trump administration’s actions against Chinese social media apps TikTok and WeChat, the latter of which is owned by Tencent. After signing an executive order banning both apps in August, Trump has demanded that they be removed from US App Stores this weekend. TikTok owner ByteDance is currently seeking an investment with Oracle to potentially avoid these sanctions.
Representatives from Epic and Riot were not immediately available to respond to a request for comment from Ars Technica.
Many fingers in many game cakes
Originally focused on licensing Western games for the Chinese market, Tencent has slowly invested more in non-Chinese companies over the years. The company owns 93 percent of League of Legends developer Riot Games since 2011 (and 100 percent since 2015) and 40 percent of Epic Games since 2012. The conglomerate also owns majority shares in clash of clans developer Supercell and Path of Exile developer Grinding Gear Games, as well as smaller stocks in companies such as Ubisoft, Activision Blizzard, Funcom, Discord, and PlayerUnknown’s Battlegrounds creator Blauwgat.
These proprietary interests have occasionally raised suspicions among some conspiracy-minded gamers, who worry that the Chinese government is collecting their gaming information or spying on their computers through Tencent’s influence over these companies.
“Epic does not share user data with Tencent or any other company,” said Epic CEO and co-founder Tim Sweeney in response to such concerns in a December 2018 Reddit thread. for advertising like so many other companies do. I am the founder and controlling shareholder of Epic and would never let this happen.”
“Tencent is a major but minority shareholder in Epic,” Sweeney added months later in another Reddit thread. “I am the controlling shareholder of Epic… The decisions that Epic makes are ultimately my decisions, made here in North Carolina based on my beliefs as a game developer about what the game industry needs!”
Last year, Riot Games insisted League of Legends esports channels not to include “personal views on sensitive topics (political, religious or otherwise)” in their broadcasts. A company spokesperson told the LA Times at the time that the long-standing policy was worth reiterating “in light of the ongoing situation in Hong Kong and the current global political environment.”