US President Donald Trump’s administration has asked gaming companies to provide information about their data-security protocols involving Chinese technology giant Tencent Holdings Ltd (騰訊), people familiar with the matter said.
The US Department of the Treasury’s Committee on Foreign Investment has sent letters to companies — including Epic Games Inc and Riot Games — to inquire about their security protocols in handling Americans’ personal data, said the people, who asked not to be named.
Tencent, the world’s largest gaming firm, owns Los Angeles-based Riot and has a 40 percent stake in Epic, which is the maker of the popular video game Fortnite.
Representatives for the companies declined to comment or did not immediately respond. The US Department of the Treasury declined to comment.
The inquiry builds on the Trump administration’s heightened scrutiny of Chinese companies and their ties to US firms — a source of fresh tension with Beijing and a pillar of Trump’s re-election campaign.
Trump has ByteDance Ltd (字節跳動), owner of the TikTok app, in his sights and is cracking down on Tencent’s WeChat app.
The committee investigates foreign acquisitions of US businesses for national security risks. It has the authority to examine full acquisitions, as well as non-controlling investments, and recommend that the US president block or unwind deals. It can also scrutinize deals that were not voluntarily reported to the committee before closing.
Aimen Mir, who ran committee reviews at the Treasury Department when he was the deputy assistant secretary for investment security, said in an interview on Bloomberg TV after the report that the committee has traditionally been concerned about protecting sensitive data, such as health, financial and government-employee information, but is broadening the type of data that it is focused on.
“When you’re talking about massive amounts of data, there’s probably something for the committee to look at,” said Mir, now a private lawyer. “The question then becomes is the risk high enough that it actually warrants forcing deals apart.”
That carries risks, including retaliation against US firms doing business in China, he added.
The US Congress in 2018 increased the committee’s jurisdiction to review transactions by foreign firms retroactively for non-controlling investments if the companies involved maintain or collect sensitive personal data of US citizens.
Tencent’s US gaming investments, including Riot Games, Epic Games and Activision Blizzard might be at risk of forced divestment similar to ByteDance’s TikTok with the committee launching an inquiry on national security grounds.
Tencent’s US assets are estimated to total at least US$22 billion, and account for 6 to 7 percent of its sales and profits.
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