In light of data privacy concerns regarding Chinese company Tencent, United States President Donald Trump has ordered gaming companies such as Riot Games and Epic Games to disclose user data storage and usage, said Screen Rant.
Tencent is known to have an investment in Riot and Epic. In fact, it owns Riot, while it holds a 40% share in Epic. Because of this, the Committee on Foreign Investment in the United States (CFIUS) issued letters to both game development companies telling them to provide info on data activities.
The order came in view of the recent crackdown by the US government on Chines technology companies including TikTok parent company ByteDance Ltd.
The CFIUS, headed by the Treasury Department, “scrutinizes acquisitions of American companies for risks to the national security.” It has the power to “reject deals involving the foreign acquisition or holding of critical infrastructure.”
The scrutiny related to Tencent is just one of the controversies faced by the two companies this year. Epic Games recently made headlines with its battle with Apple regarding the fees associated with apps available on the App Store.
On the other hand, Riot Games has been embroiled in issues for discrimination claims against female employees and applicants. This resulted in the company offering to settle for millions of dollars.
The firm also drew flak for partnering with a state-sponsored Saudi Arabian project called Neom. Players threatened to boycott its games, which pushed the company to set up an ethics committee to address issues.
The scrutiny over Neom stems from human rights violations connected with the Saudi Arabian government.
The Trump administration’s move to scrutinize and ban tech firms that have connections with Chinese companies has sparked fears that more will follow the fate of TikTok, which has been banned in the US.
Polygon noted that Epic and Riot are not the only gaming companies that received investments from Tencent. Some of the firms partly owned by the Chinese firm include Activision Blizzard, Roblox Corporation, Discord, Glu Mobile, Reddit, and Snap.
Screen Rant added that another US company received investments from Chinese firms including NetEase, the creator of the Rules of Survival game.
Meanwhile, the US government’s actions against companies with Chinese ties did not go unchallenged as ByteDance, the owner of TikTok, filed a case last month claiming that the administration did not allow the firm due process.
