Tencent removes directors from Epic Games after Justice Dept. inquiry

Two Tencent directors have departed from Epic Games’ board of directors, according to the U.S. Justice Department. In a statement, the department explained these exits came about in light of concerns about their positions on the board being anti-competitive and in violation of Section 8 of the Clayton Act.

Similarly, Tencent has amended a part of its shareholder agreement with Epic and “relinquished its unilateral right to appoint directors or observers to the Epic board in the future.”

As the statement explains, Section 8 stops directors and officers from “serving simultaneously on the board of competitors.” Tencent has had a minority stake in Epic since 2012, and is the parent company of League of Legends creator Riot Games. The two studios are major players in the industry, and Tencent’s investment in both previously drew scrutiny from the U.S.’ Committee of Foreign Investment.

The Department’s inspection into Tencent and Epic’s relationship “is the latest of the division’s ongoing Section 8 enforcement efforts, which to date have unwound or prevented interlocks involving at least two dozen companies.”

“Scrutiny around interlocking directorates continues to be an enforcement priority for the Antitrust Division,” said the Antitrust Division’s deputy director Miriam Vishio. “Due to the hard work of our tremendous staff, our increased enforcement around Section 8 over the last few years has achieved substantial results and become part of our fabric.”

Epic Games, epic legal battles

In recent years, Epic Games has been subject to scrutiny by the U.S. government. Earlier this month, the FTC started sending refunds to Fortnite players who had been tricked into making unwanted purchases between 2017 and 2018.

The entire saga first began in December 2022. At the time, the FTC and Epic reached a $520 million settlement after the latter had been accused of using various “design tricks” to “dupe millions of players into making unintentional purchases.”

Epic was also ordered to give $245 million of that settlement back to customers, and the FTC began the refund process in September 2023. The amount of refunds reportedly total over $72 million.

The Fortnite maker has also actively used the country’s court system to settle its affairs, namely with Apple. Its legal clash with the tech company led to a court ruling that Apple would lift some restrictions for third-party payments on its App Store. Last year, Apple successfully argued to the Ninth Circuit that it had not engaged in antitrust practices against Epic.

Months later, Epic appealed that new ruling to the Supreme Court, which ultimately rejected both companies’ appeals back in January.

This story has been updated to clarify the Justice Department’s concerns about Epic and Tencent were not a full-on investigation, and Epic’s $245 million fine was already baked into its initial FTC settlement.

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