CARY – Epic Games reportedly is getting caught up in the growing fued between the United States and China with the Trump administration seeking information about data protocols between Epic and China-based tech giant Tencent.
The request reportdedly focuses on how US users’ personal data for such games as Epic’s global hit Fortnite is protected.
Tencent owns some 40% of privately held Epic after investing more than $300 million in the company in 2012.
The news come as Epic’s legal fights with Apple and Google continue over Fortnite and 30% commissions the net giants charge for sales made through their respective app stores.
Also involved in the information request is Riot Games, according to Bloomberg news. Riot is based in Los Angeles and is owned by Tencent.
While most media attention has focused on social media platform TikTok, Tencent and its social platform WeChat is under scrutiny as well.
In fact, early Friday, the Commerce Department said it would ban U.S. business transactions with Chinese-owned social apps WeChat and TikTok on Sunday.
“The Committee on Foreign Investment in the US (CFIUS), which is chaired by the Treasury Department, has sent letters to companies, including Epic Games, Riot Games and others, to inquire about their security protocols in handling Americans’ personal data,” Bloomberg reported. It cited as sources “who asked not to be named because the discussions are private.”
Tencent, Epic and Riot have yet to comment.
CFIUS is charged with the mission of investigating national security risks that could arise from foreign companies’ acquisitions of US businesses.
“CFIUS is an interagency committee authorized to review certain transactions involving foreign investment in the United States and certain real estate transactions by foreign persons, in order to determine the effect of such transactions on the national security of the United States,” it says.
Bloomberg adds that CFIUS “has authority to examine full acquisitions as well as non-controlling investments and recommend that the president block or unwind deals. It can also scrutinise deals that were not voluntarily reported.”
In August, President Donald Trump ordered a ban on Tencent’s WeChat app. The scope of those restrictions are expected to be announced by the Commerce Department around Sept. 20. But it won’t target people who use the app to communicate, according to a government court filing Wednesday.
President Donald Trump issued orders on Aug. 6 that targeted WeChat and TikTok as purported national-security threats and imposed a Sept. 20 deadline for the Commerce Department to draft specific measures for blocking “transactions” with the Chinese owners of the apps.
The nonprofit U.S. WeChat Users Alliance and several people who say they rely on the app for work, worship and staying in touch with relatives in China sued to stop the ban in federal court in California. The suit says the ban violates its U.S. users’ freedom of speech, free exercise of religion and other constitutional rights.
The WeChat users, who say they are not affiliated with WeChat or its parent company, Tencent, are seeking an injunction to against the order, and a hearing is scheduled for Thursday.
WeChat users in the U.S. depend on the app to talk to friends, family and colleagues in China, where the messaging, payments and social media app is widely used. It has several million users in the U.S.
The Justice Department said in the Wednesday filing that the Commerce Department “does not intend to take actions that would target persons or groups whose only connection with WeChat is their use or downloading of the app to convey personal or business information between users.” It added that such users would not be exposed to “criminal or civil liability.”
The government filing said that using and downloading the app to communicate won’t be a banned transaction, although messaging on the app could be “directly or indirectly impaired” by the ban.
The Justice Department’s filing said that these “assurances largely address” concerns raised by the plaintiffs who called for an injunction.
(The Associated Press contributed to this report.)