Epic’s Tencent-appointed directors step down amid DOJ probe
Two directors appointed to Epic Games by Tencent Holdings, the Chinese multinational tech company, have resigned from the Fortnite creator’s board following concerns raised by the U.S. Department of Justice (DOJ). The resignation comes in the wake of an ongoing antitrust investigation questioning the legality of their positions on both Epic Games and Tencent’s boards.
Antitrust concerns and resignations
The raised concern that the dual board memberships of these directors violated Section 8 of the Clayton Act, which prohibits individuals from serving simultaneously on the boards of competing companies. Tencent, a minority shareholder in Epic Games, also owns Riot Games, the developer behind League of Legends—a direct competitor to Fortnite. The DOJ’s investigation into this overlap of directors came from fears of anti-competitive practices.
Tencent and Epic Games released statements confirming the resignation of the two directors, who were members of Epic’s board but held a minority of votes. Epic Games stressed that the resignations were voluntary, based on the DOJ’s expressed concerns.
Tencent amends shareholder agreement with Epic Games
As part of the response to the investigation, Tencent has decided to amend its shareholder agreement with Epic Games. The change relinquishes Tencent’s unilateral right to appoint directors or board observers in the future. This move is expected to address any perceived conflicts of interest and demonstrate Tencent’s willingness to cooperate with the DOJ’s scrutiny.
DOJ’s focus on interlocking directorates
The investigation is part of a broader antitrust enforcement initiative by the U.S. Department of Justice, focusing on the issue of interlocking directorates, where individuals hold positions on the boards of competing companies. According to Miriam R. Vishio, Deputy Director of the DOJ’s Antitrust Division, scrutinising these interlocking directorates remains a priority to prevent anti-competitive practices in the market.
This investigation follows a growing trend of regulatory oversight of foreign influence in U.S. companies, particularly in the tech and gaming industries. The DOJ has not indicated that national security concerns related to Tencent were part of its investigation, unlike other Chinese companies facing similar scrutiny, such as ByteDance, the parent company of TikTok.
The world’s biggest iGaming community brings you SiGMA’s Top 10 news countdown. Our weekly newsletter brings you all the latest from the world’s iGaming authority. Subscribe to stay ahead and unlock subscriber-only offers.
