Tencent Gaming Stake Under Tight Scrutiny Over Security, Data Concerns

September 18, 2020 3:19 pm

Beijing (PingWest)- The U.S. Treasury’s Committee on Foreign Investment in the U.S. (CFIUS) has asked gaming companies including Riot Games and Epic Games to provide information about security protocols related to user data because of their deep ties with Tencent, Bloomberg reported Thursday, citing people familiar with the matter said.

CFIUS has sent inquire letter to Epic Games, Riot Games, asking them to provide security protocols in handling Americans’ personal data, the source said.

Tencent, the world’s largest gaming company by revenue, has quietly built its gaming empire through aggressive investment. It has invested for varying size of stakes in gaming developers and publishers around the world.

League of Legend and Valorant developer Riot Games became a wholly-owned subsidiary of Tencent after the Chinese gaming giant paid USD400 million for a 93 stake in Riot Games in February 2011, Tencent bought the remaining 7 percent in December, 2015.

Tencent also own a 40% stake in Fortnite maker Epic Games.

The latest move is part of escalating scrutiny on Chinese companies and their link to U.S Firms by the Trump administration.

In August, President Trump sign executive order banning Tencent’s WeChat.

The ban will take effect in 45 days but the scope of the ban is vague, Secretary of Commerce Willbur Ross said the government shall identify the transactions that will be subjected to the prohibition. So it still remain uncertain that the executive orders will affect WeChat’s operation in the U.S or it will also hit Tencent’s other business offerings.

The scale of the ban is expected to be announced by the U.S Commerce Department around September 20.