President of the United States Donald Trump has called Riot and Epic Games into question after controversial TikTok ban
The geopolitical sphere is coming to a head with the gaming world in a very big way. On Thursday, the U.S. ordered any American based app stores to remove TikTok and WeChat from publication due to “national security threats”
What is a national security threat?
China and the U.S. have been in a power feud for the past 40 years and tensions have been escalating as Trump looks to crack down on Chinese data harvesting. While many American applications like Google are banned in China, the U.S. has had no significant restriction on Chinese technological inflows
ByteDance and Tencent are China based companies that have taken a huge brunt of Trump’s scrutiny; they own TikTok and WeChat respectively. All companies based in China must report all data to the Chinese Communist Party. The net result offers a rivaling country a backdoor to our most sensitive information
Tencent also owns a significant stake in Epic Games and a majority stake in Riot Games, the developers of League of Legends among other hit titles
Blah blah blah, this is all so boring. Just tell me if Fortnite is getting banned
Bottom Line
The United States administration has specifically targeted companies that operate in China and route sensitive data towards the CCP. While Tencent does have over a 40% stake in Epic Games, they are a passive investor with zero ties to the data it produces
Epic Games CEO Tim Sweeney confirmed that Tencent has zero operating power. In 2019, Blizzard-owned Hearthstone banned a tournament player for voicing against the Chinese Government. “That will never happen on my watch as the founder, CEO, and controlling shareholder [of Epic Games],” Sweeney said on Twitter
Epic is a US company and I’m the controlling shareholder. Tencent is an approximately 40% shareholder, and there are many other shareholders including employees and investors.
— Tim Sweeney (@TimSweeneyEpic) October 9, 2019
To finally answer the big question: No, Epic Games is probably safe from legal scrutiny in the United States
New development
Just hours ago, Trump approved a deal that would unban TikTok from the United States. Oracle and - out of all companies - Walmart will jointly purchase a stake in TikTok that would make the company majority owned by American companies
The interim head of TikTok, Vanessa Pappas, just shared this message with employees: “We are pleased that the President today has approved in concept a proposal we made that resolves the Administration's security concerns and settles questions around TikTok's future in the US.”
— Alex Heath (@alexeheath) September 19, 2020
This is good news for all you TikTok-ers (if that’s what you preferred to be called). More importantly for the Fortnite fans reading this, the broader implications for the gaming sphere shouldn’t be overlooked
The U.S. just set a precedent that if a company is majority owned and the data is operated by Americans, the company will be in full legal compliance. Epic Games already fits within those criteria meaning any more inquiries from the Trump cabinet shouldn’t jeopardize our beloved game
We’ll keep you updated on any further developments. In the meantime, follow us on Twitter to never miss a thing