Tencent Directors Resign from Epic Games Amid US Antitrust Concerns
Two directors appointed by Chinese tech giant Tencent Holdings to the board of Epic Games, the creator of Fortnite, have resigned following a US Department of Justice (DOJ) antitrust investigation, Al Jazeera reports.
The DOJ expressed concerns that the directors’ simultaneous positions on both the Epic and Tencent boards violated the Clayton Act.
The Clayton Act, specifically Section 8, prohibits directors from serving concurrently on the boards of competing companies, with limited exceptions. The DOJ cited Tencent’s ownership of Riot Games, a Los Angeles-based video game developer and esports organizer, as a conflict of interest.
“Scrutiny around interlocking directorates continues to be an enforcement priority for the Antitrust Division,” stated Deputy Director of Civil Enforcement Miriam R. Vishio. Tencent, in an emailed statement, affirmed its commitment to its relationship with Epic Games, emphasizing their shared focus on game development and player experience.
While Epic Games, known for both Fortnite and the Unreal Engine, is privately held, Tencent holds a minority stake. Other investors include Sony, Disney, Fidelity, and BlackRock. Tencent, incorporated in the Cayman Islands but headquartered in Shenzhen, China, is one of the world’s largest multimedia companies.
Notably, the DOJ statement did not raise national security concerns, unlike the scrutiny faced by other Chinese tech companies operating in the US. This contrasts sharply with the ongoing situation surrounding ByteDance, the owner of TikTok, which faces a January 19 ban unless it divests the platform.
As a result of the investigation, Tencent has agreed to amend its shareholder agreement with Epic, relinquishing its right to unilaterally appoint directors or observers to Epic’s board. The DOJ emphasized that no company or individual admitted liability in connection with the investigation.
