Tencent In Talks With The US Government To Keep Gaming Investments
Tencent is negotiating with the US government for a deal that would allow the company to keep some of its gaming investments in the United States, people familiar with the matter said. The Chinese technology giant, which has been in business since the second half of last year, is likely to receive an order to sell some or all of its U.S. holdings, the sources said.
Chinese gaming giant Tencent is in talks with a major US security body, according to a Wall Street Journal report. It even includes a large Chinese market, as do a number of other companies such as Alibaba, Tencent’s rival in China.
Tencent is in a legal battle with the US Securities and Exchange Commission over the use of its data. The committee is responsible for the way companies share their data, and Tencent is excluded from a number of US government agencies, including the US Department of Homeland Security and the FBI.
Tencent is reportedly negotiating with the US National Security Council to maintain its investment in games such as League of Legends and Epic Games. Tencent owns shares in Riot Games, outperforming its parent company Riot Entertainment and a majority stake in the company. As a “Chinese company,” Tencent has often damaged its reputation, and it has been blamed by economists and analysts for its much-vaunted impact on the Chinese market’s potential. The Chinese government’s restrictions on the company’s ability to create content such as video games and other online content have raised concerns about its ability to prevent content that would be banned by the Chinese government in its own country. Ten Cent had to comply with the personal data laws that the Chinese government has, according to a New York Times report.
U.S. officials ultimately deliberated and decided against banning Tencent Holdings Ltd., China’s second-largest online gaming company, after canceling a $1.2 billion investment in the company’s gaming business, a person familiar with the discussions told Reuters.
Officials also discussed blocking search engine operator Baidu Inc but dropped the plan, the person added. The Treasury blocked the two Internet companies from investing $1.2 billion in Tencent’s gaming business because they wanted to help the military, said a person familiar with the talks who did not want to be named. “The Chinese government,” the person said in response to concerns about the potential impact of the investments on the Chinese economy.
The source told Reuters there was no guarantee that Tencent would be able to reach an agreement, but declined to comment to Reuters. A spokesman for Riot Games told Reuters that Riot Games operates independently of Tenent and has implemented industry-leading practices to protect player data.
The Chinese internet giant, also known as BAT, remains available to American investors. CFIUS has reportedly focused on the data in recent years, citing concerns that the private data of US citizens could be passed on to the Chinese Communist Party.
The company has also been accused of links to the Chinese Communist Party and its military-industrial complex. The company is a symbol of China’s economic modernity and growth and has long maintained ties with the US government and the US government.
On January 7, reports surfaced that Baidu, Alibaba, and Tencent could be added to the growing list of companies that have been excluded from the US Securities and Exchange Commission’s anti-money laundering program. According to a Wall Street Journal report, American companies that hold shares in companies that have been banned, such as Apple, Microsoft, Google, Facebook, and Twitter, are all owned by US investors. Former President-elect Donald Trump and Attorney General Jeff Sessions have signed executive orders banning the sale of US securities to companies with ties to the Chinese Communist Party and the military-industrial complex.
Many thought that Tencent would also turn its investment in video games like Epic Games “Unreal Engine and Fortnite upside down. Reuters reported that Tencent Holdings, according to people familiar with the matter, is negotiating with the Securities and Exchange Commission on an agreement that will allow it to retain ownership of Riot Games and Epic Game. “Tencent Holdings is negotiating an agreement with the U.S. Securities and Exchange Commission and the U.S. Department of Justice (DOJ) that will allow it to retain ownership of Riot Games and EPIC Games.
Negotiations are ongoing, meaning the talks will take place at the same time as talks between Chinese and President-elect Joe Biden. It would be another unprecedented step to close off historically unfettered commercial access to the United States, without taking into account things like weapons systems. Expanding this argument to gaming could open the possibility of an ongoing trade war between the US, the US, and China for the duration of Trump’s presidency.