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Report: Riot Games, Epic Games come under US Gov't scrutiny over Tencent ties

Bloomberg reports that the US Committee on Foreign Investment has sent letters of inquiry to both Riot Games and Epic Games due to their business ties to Tencent games.

Days before the Trump administration is due to take action to ban two Chinese apps, Tiktok and WeChat in the United States, the US Committee on Foreign Investment has started scrutnizing the data security protocols of US-based game companies with ties to the Chinese tech giant Tencent.

According to Bloomberg, the Committee has sent letters of inquiry to several game companies with business or financial ties to Tencent, though only Epic Games and Riot Games are named in the publication’s reporting.

Both companies represent major forces in the game industry, and both count Tencent among their shareholders with the company holding a 40 percent stake in Unreal Engine and Fortnite maker Epic Games as well as 100 percent ownership of League of Legends studio Riot Games.

While neither the Treasury Department nor the studios in question responded to Bloomberg’s request for comment, its sources say the Committee on Foreign Investment is seeking information on how the personal data of American citizens is handled by both companies and on the security protocols involved in that data, given their ties to the Chinese company.

In the case of Epic Games, CEO Tim Sweeney has previously been especially vocal about the role Tencent does (or, rather, doesn’t) play in the company’s decision making process or its programs like the Epic Game Store. The company faced a good deal of criticism online following the launch of that storefront over unfounded rumors of Tencent-driven data collection, prompting Sweeney to debunk those theories over Twitter.

"I’m the controlling shareholder in Epic Games, and have been since 1991. We have a number of outside investors now," tweeted Sweeney last April. "Tencent is the largest. All of Epic’s investors our friends and partners. None can dictate decisions to Epic. None have access to Epic customer data."

Still, the potential impact of a US government inquiry of Tencent-backed game companies is worrying. Tiktok stands to be banned from US-based app stores on Sunday and, in November, from using cloud or internet services in the US despite the CIA concluding last month that there is no evidence its data has ever been accessed by the Chinese government. If any similar sort of sweeping action is applied by the US Government against Tencent, it stands to impact the dealings of the hundreds of companies that count the tech conglomerate among their investors, not to mention those that have partnerships with it to launch their games and services in China.

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