WeChat, China’s most popular multi-purpose social media app, came under attack by the Federal Government as the app posed a security risk, ultimately banning Wechat and Bytedance’s TikTok. While the United States is not alone, India has banned the app and Japan is motioning to ban it a well, the Federal Government is now expanding its aim at Tencent’s influence in the videogame sphere.
Tencent is currently the world’s largest gaming company, but most importantly they own the Los Angeles based Riot Games, which owns Valorant and League of Legends, which is the most popular game on PC for the time being, along with 40% share in Epic Games. The Committee on Foreign Investment sent letters to the companies, asking about their security policies and how they handle the personal information about their American users. The Treasury Department, who heads the Committee on Foreign Investment, and representatives from each company is yet to comment. The investigation could prompt similar action against Tencent’s videogame sphere to what happened against Wechat and TikTok.
“When you’re talking about massive amounts of data, there’s probably something for the committee to look at,” said Aimen Mir, who ran Cfius reviews at the Treasury Department as a part of The Committee on Foreign Investment. “The question then becomes is the risk high enough that it actually warrants forcing deals apart.”
Bloomberg analysts Vey-Sern Ling and Tiffany Tam estimate that Tencent’s assets in the United States are worth 7% of the company at $22 billion. Tencent has been buying shares in Activision-Blizzard and they are planning on expanding their holding in the United States. One concern for the government with taking action against the Communist Party of China is the potential for retaliation against American companies doing business in China or against American ex-pats living inside China’s borders.