Riot And Epic Games Questioned Over Tencent Data Security Case
Concerns have been raised with the security arrangements over the personal data of American citizens at Epic Games and Riot Games, with the association both companies have with Chinese firm Tencent prompting questions from the Trump administration. Tencent has been a big investor in gaming studios over recent years and most recently gave a huge injection of funds into Platinum Games.
The Trump administration has come down hard on Chinese technology companies over the last few months. Most recently, the President ordered social media app Tik Tok owner ByteDance to sell its US operations and delete all data it holds on American users in an executive order earlier this year. The move prompted tech giants such as Microsoft and Oracle to put in bids for the hugely popular service, the latter of which has been awarded the lucrative and bizarre deal. However, the legality of the ban has been questioned and ByteDance has filed legal paperwork to battle the executive order in court.
President Trump has ordered gaming companies such as Epic Games and Riot Games to provide information about how data on American users is stored. This is due do an investigation that the Trump administration is instigating against Chinese technology company Tencent. A report by Bloomberg indicates that the Committee on Foreign Investment in the U.S. has sent letters to both studios amid concerns over the security of personal data of US citizens. The issue comes from the fact that Tencent, which is one of the world's biggest gaming companies, owns Riot Games and has a 40% stake in Epic Games.
Meanwhile, the two companies have faced lots of scrutiny this year. Riot Games has been under pressure throughout 2020 over allegations that it had discriminated against female employees and candidates, prompting the company to propose a multi-million dollar settlement. The studio also caused controversy when it announced a partnership with a Saudi Arabian state-sponsored project NEOM. The subsequent uproar and threat of boycotts from players and sponsors led to Riot setting up its own ethics committee. On the other hand, Epic Games has inflicted a high-profile legal battle with Apple upon itself over the fees iPhone maker charges for in-game purchases.
The new move from the Trump administration will prompt fears that the US government could take action against gaming companies that have ties with Chinese companies. That would include many more than just Epic Games and Riot Games, as the likes of Bungie also have investors from Chinese firms such as NetEase. There will definitely be concern considering the recent pressure being put on Tik Tok's creator ByteDance.
Source: Bloomberg