The Trump administration has chosen its next target and is cracking down on Chinese tech giant Tencent, which has significant holdings in some of the world’s most popular gaming companies. Donald Trump is set to meet Chinese President Xi Jinping in April, and top officials are weighing whether Tencent’s influence over US and Finnish developers, including Epic Games and Riot Games, represents a legitimate national security threat.
Reportedly, cabinet-level meetings have been scheduled to investigate whether Tencent’s 28 percent stake in Epic Games and its full ownership of Riot Games give Beijinga backdoor to American data. Beijing had historically criticized Washington for targeting Chinese firms, but the massive scale of Tencent’s reach has made this review one of the longest-running and most contentious in recent memory.
White House Wants To Maintain Data Privacy
The main concern of this investigation is the huge amount of personal information collected by these gaming companies. The data includes financial details, personal identification, and private game chat. Many upper officials believe that the data collected can provide the Chinese government with good source information.
Things got heated up after the Pentagon recently placed Tencent on a list of companies alleging their connections to the Chinese military. However, the tech giant has denied this claim multiple times.
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The Committee on Foreign Investment in the US (CFIUS) has been discussing how to handle Tencent’s investments in these giants. Some argued that Tencent must be forced to sell its stakes completely, while others believe that governement can implement data protection agreements to eliminate the security risks.
Tencent Is Discussing Privacy Policy Amid National Security Review
As of now, Tencent is negotiating to smoothly rectify Washington’s concerns. However, it’s the Trump administration that will pass the final verdict. People have to wait and see if both parties agree on a common solution or the US will play “hardball.” This decision will ultimately decide how the US will treat “Chinese military companies” moving forward.
Tencent is not the only Chinese firm in the US government’s crosshairs. The Trump administration has also set its eye on firms like Alibaba and BYD. However, there is a concern that gaming and entertainment companies are the new source to harvest data.
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If the White House indeed forces Tencent to sell off its stakes in firms like Epic Games and Riot Games, it would shake up the global gaming industry.
