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Donald Trump’s Tiktok ban has been elevated to the next level. He’s effectively given both Tiktok and WeChat 45 days to sell the U.S. branch of their companies to a company that doesn’t have any Chinese ownership. Tencent is mentioned by name in the ban — and that could soon spell trouble for the gaming world.
The White House letter regarding President Donald Trump’s Tiktok ban reads:
“[The] spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States. To protect our Nation, I took action, in an Executive Order of August 6, 2020 […] to address the threat posed by one mobile application, TikTok. I have now taken further action to address a similar threat posed by another mobile application, WeChat.”
At the moment, this ban is targeting Chinese-owned social media applications like Tiktok and WeChat. However, it sets a precedent that a day could soon come that gaming companies will be faced with a similar decree.
Why is the President banning Tiktok and WeChat?
The reasons for the ban are outlined in the White House letter detailing President Trump’s new executive order.
“Like TikTok, WeChat automatically captures vast swaths of information from its users — threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information,” the letter reads.
This wasn’t the only concern, though. The White House letter notes that both companies censor content the Chinese government considers “politically sensitive” and that this information could be used to track former or current Chinese citizens living in the United States.
These actions are being undertaken through the use of the International Emergency Economic Powers Act (IEEPA). In short, this law allows the President to “deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.” Such an emergency has been declared, allowing President Donald Trump’s Tiktok ban to go forward.
How President Donald Trump’s Tiktok and WeChat ban could affect gaming
A plain reading of the White House letter shows that it doesn’t involve gaming whatsoever. Instead, this ban is solely focused on two social media apps. It does, however, mention one company by name — a company that has been gaining influence in the gaming world through investments and outright purchases of various publishers, developers, and related services. That company is, of course, Tencent.
The Executive Order mentioned by the White House letter prohibits any financial transactions with Tencent by name. This doesn’t affect gaming just yet. The E.O. is specifically focused on dealings in relation to WeChat. Additionally, Los Angeles Times tech reporter Sam Dean further confirmed that the gaming world is safe for the moment.
Video game companies owned by Tencent will NOT be affected by this executive order!
White House official confirmed to the LA Times that the EO only blocks transactions related to WeChat
So Riot Games (League of Legends), Epic Games (Fortnite), et al are safe
— Sam Dean 🦅 (@SamAugustDean) August 7, 2020
“Video game companies owned by Tencent will NOT be affected by this executive order!” Sam Dean said on Twitter. “White House official confirmed to the LA Times that the EO only blocks transactions related to WeChat[.] So Riot Games (League of Legends), Epic Games (Fortnite), et al are safe[.]”
However, Tencent has invested in many gaming companies over the last few years. This includes an investment in Platinum Games earlier this year, millions in funding to Discord in 2018, and ownership of six of the ten largest mobile games in the world. Lest we forget, Tencent owns a significant minority stake in Epic Games (the owner of the blockbuster battle royale Fortnite), Riot Games (owners of League of Legends and Valorant), Ubisoft, and stakes in countless other gaming companies.
The concerns raised by President Donald Trump’s Tiktok ban can just as easily apply to gaming. Without independent audits of source code, we truly cannot say what information (if any) the various games and digital storefronts we use are quietly collecting in the background. We also don’t know what information is ultimately being collected and/or monitored by the Chinese government.
Given these concerns and the broad powers given to the President via the IEEPA, he may well make a broader executive order targeting Tencent itself. Should that happen, any companies that have been invested in by Tencent would likely have the same 45-day period to divest from their partial Chinese ownership. Such a move would likely be quite costly, potentially delaying or canceling goodness knows how many upcoming games and other projects.
For now, President Trump’s concerns are firmly focused on social media. We don’t have to be worried just yet, but a stronger action against Tencent is a possibility that game publishers, developers, and storefronts may soon have to contend with.