The ongoing battles between the U.S. and China will become even more complicated as the former has started to target companies that are tied to Tencent Holdings, a Chinese company and one of the largest conglomerates in the world.
A new report released by a reliable news outlet notes that CFIUS (Committee on Foreign Investment in the U.S.) has sent official letters to Epic Games. Riot Games and other prominent companies that have signed deals with Tencent, asking about more information related to security protocols and and how the private data of American citizens is handled.
Tencent is the largest gaming company in the word, and the titan has invested a lot of money is companies related to video games. It acquired a majority stake in Riot Games in 2011 and purchased the remaining stakes in 2015, becoming the sole owner.
Investments were also made into Epic Games, earning a 40% stake in exchange for $330 million in 2012 and Activision Blizzard, where Tencent enjoys a 5% stake that offers access to the famous Call Of Duty IP. Overall, Tencent owns stakes in more than 300 companies.
Based on previous actions, it is likely that the main aim of the U.S. government is national security, as it is known that Chinese companies are forced to grant access to user information according to Chinese laws. As such, it is feared that China may gain access to the private information of millions of American citizens who enjoy video games.
Some actions were already taken against Tencent as the popular WeChat app was banned, while TikTok owner ByteDance could be forced to sell its assets to an American company. After an offer from Microsoft was rejected, ByteDance may sign a deal will Oracle.
What will happen with TikTok, at least in the U.S., remains to be seen.
Willie Hahn, senior editor at The Trending Times, writes about the intersection between money and politics with a focus on lobbying and tech articles. Willie previously at the Android Authority and Vice. Willie can be reached by email.