US government questions ‘Fortnite’ maker over China, Tencent ties – Business Insider – Business Insider

  • The wildly popular smartphone apps TikTok and WeChat will be banned in the US starting on September 20, the US government announced on Friday morning.
  • CFIUS, the same Treasury group that initated those investigations, is now looking into “Fortnite” maker Epic Games and “League of Legends” maker Riot Games due to their associations with the Chinese conglomerate Tencent, Bloomberg reported.
  • Tencent, which owns WeChat, wholly owns Riot Games and owns a 40% stake in Epic Games. 
  • Visit Business Insider’s homepage for more stories.

After taking action against the wildly popular smartphone apps TikTok and WeChat, President Trump’s administration appears to be setting its sights on the gaming studios behind two of the biggest games in the world: “Fortnite” and “League of Legends.”

The same government body that investigated TikTok and WeChat is now looking into Epic Games and Riot Games, according to a new Bloomberg report. Both companies received letters from the Committee on Foreign Investment in the US (CFIUS), the report states, regarding how they handle security for American user data, the report says.

The issue appears to be the two companies’ relationship with Chinese conglomerate Tencent. 

Tencent owns a 40% stake in Epic Games, based in Cary, North Carolina, and wholly owns Riot Games, based in Los Angeles, California. Epic is most well-known for “Fortnite,” but also operates other popular games, including “Rocket League.” Riot is most well-known for “League of Legends” and, more recently, “Valorant.” Both companies operate games with hundreds of millions of players.

Tencent itself is far from a bit player in the world of gaming — it’s quietly the biggest game company in the world. Aside from its significant stake in Epic and outright ownership of Riot Games, Tencent has investments in Supercell, Ubisoft, Activision, and other notable game publishers. 

The company is already facing scrutiny from the US government for its ownership of WeChat, one of two major apps run by Chinese companies that were banned in a federal order on Friday morning.

Starting this Sunday, September 20, the wildly popular video app TikTok and the messaging and commerce app WeChat will no longer be available through Apple and Google’s digital storefronts.

Moreover, if you’ve already got the apps on your phones, future updates won’t be allowed, under the text of that order.

That’s according to an order published by the US Department of Commerce on Friday morning which says that starting on September 20, 2020, TikTok will be barred from software updates and distribution in the US. WeChat is also being pulled and having its updates stopped, but the order goes a step further: It outright bars internet service providers from working with WeChat, thus nullifying critical components of how the app operates.

Whether the order goes into effect on Sunday as planned still remains to be seen.

China-based TikTok owner ByteDance has reportedly negotiated some kind of deal over its US operations with Silicon Valley tech giant Oracle, which is awaiting the green light from the White House. If this deal is approved and confirmed by Sunday, it could obviate the order entirely, Reuters reported. However, that would still seemingly leave WeChat subject to the terms of the order, making the app’s future in the US uncertain. 

The order follows the Trump adminstration’s wider efforts to force a sale of TikTok’s US business to a US firm in the name of national security. President Trump has repeatedly insisted that TikTok, because it is owned and operated by a Chinese company, is collecting information from users in the US and feeding that information to the Chinese government. 

Representatives for Epic Games and Riot Games declined to comment. The US Department of the Treasury did not respond to a request for comment.

Got a tip? Contact Business Insider senior correspondent Ben Gilbert via email (bgilbert@businessinsider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

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