Tencent is a key stakeholder in several gaming companies.
China’s Tencent, one of the world’s biggest video game publishers, has relinquished its right to appoint directors and observers to the board of Epic Games Inc., with two Tencent-appointed directors resigning, the Department of Justice (DOJ) announced on Dec. 18.
The DOJ had been investigating Tencent for antitrust law violations. Section 8 of the Clayton Act prohibits people from serving as directors or officers in any two corporations that are engaged in commerce or competition, with exceptions for banking and trust companies.
Tencent is a minority shareholder in North Carolina-based Epic but also owns California-based Riot Games, a main competitor to Epic.
“Scrutiny around interlocking directorates continues to be an enforcement priority for the Antitrust Division,”
stated Deputy Director of Civil Enforcement Miriam R. Vishio of the Justice Department’s Antitrust Division.
Tencent is similar to the Chinese equivalent of Alphabet or Google and is the parent company for a wide range of digital services in China, such as the popular messaging app WeChat. Tencent has invested in hundreds of companies, including Ubisoft Entertainment and Supercell, though its
investments in major
gaming companies came under the spotlight as Beijing imposed unique restrictions on gaming for Chinese citizens.
Tencent is also a
publisher of games, including Brawl Stars, Delta Force, and Valorant. According to its most recent earning
report, it ranks No. 1 globally in the gaming market by revenue.
Like ByteDance’s holding of TikTok, Tencent’s
ownership of
WeChat has come under U.S. scrutiny. During his first administration, President Donald Trump singled out WeChat as a national security risk in an
executive order, citing concerns that the Chinese Communist Party could access Americans’ personal and proprietary information.
According to OpenSecrets, which tracks spending in politics, Tencent spent
$6.3 million in the three years on federal lobbying after the 2020 executive order, even though the order did not result in a ban.
TikTok is in a more precarious situation after President Joe Biden signed a law earlier this year that would require China-based ByteDance to sell the app by Jan. 19, 2025, for TikTok to continue operating in the United States.
Biden has the authority to issue a one-time 90-day extension of the deadline. Still, TikTok is asking the U.S. Supreme Court to
intervene, by either declaring the law unconstitutional or delaying its implementation to give the new administration a chance to reverse what the app calls a “ban.”
The high court agreed to hear the case on a highly expedited schedule, with two hours of oral arguments scheduled for Jan. 10, 2025.
