Business Maverick

Business Maverick

Tencent’s Gaming Stakes Draw US National Security Scrutiny

The Epic Games Fortnite: Battle Royale video game on a mobile device. Photographer: Andrew Harrer/Bloomberg

The Trump administration has asked gaming companies to provide information about their data-security protocols involving Chinese technology giant Tencent Holdings Ltd., people familiar with the matter said.

The Committee on Foreign Investment in the U.S., which is chaired by the Treasury Department, has sent letters to companies, including Epic Games Inc., Riot Games and others, to inquire about their security protocols in handling Americans’ personal data, said the people, who asked not to be named because the discussions are private.

Tencent, the world’s largest gaming company, owns Los Angeles-based Riot and has a 40% stake in Epic, which is the maker of the popular video game Fortnite. Representatives for the companies declined to comment or didn’t immediately respond.

The Treasury Department declined to comment. Tencent’s American Depositary Receipts fell 2.4% to $66.66 after the report.

Cfius investigates foreign acquisitions of American businesses for national security risks. It has authority to examine full acquisitions as well as non-controlling investments and recommend that the president block or unwind deals. It can also scrutinize deals that weren’t voluntarily reported.

All About Cfius, Trump’s Watchdog on China Dealmaking: QuickTake

Congress in 2018 increased Cfius’s jurisdiction to review transactions by foreign companies retroactively for non-controlling investments if the companies involved maintain or collect sensitive personal data of U.S. citizens.

The latest move is part of heightened scrutiny on Chinese companies and their ties to U.S. firms by the Trump administration. In August, President Donald Trump ordered a ban on Tencent’s WeChat app. The scope of those restrictions are expected to be announced by the Commerce Department around Sept. 20.

Trump has escalated his fight with Beijing in recent months as the November presidential elections approach and has blamed China for the Covid-19 pandemic.

Gallery

Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options