The US Department of Justice says it expressed concerns directors’ positions on two company boards violated Clayton Act.
Two directors of Fortnite creator Epic Games who were appointed by Chinese tech company Tencent Holdings have resigned their positions in the wake of an antitrust investigation in the United States.
The US Department of Justice said in a statement on Wednesday that it had “expressed concerns” that the directors’ positions on both the Epic and Tencent boards were in violation of the Clayton Act because Tencent owns Riot Games, a Los Angeles-based video game developer and e-sports organiser.
Section 8 of the Clayton Act “prohibits directors and officers from serving simultaneously on the boards of competitors, subject to limited exceptions”, according to the Justice Department.
“Scrutiny around interlocking directorates continues to be an enforcement priority for the Antitrust Division,” said Deputy Director of Civil Enforcement Miriam R Vishio of the Justice Department’s Antitrust Division.
Epic Games and the US Justice Department did not immediately respond to Al Jazeera’s request for comment.
“Our relationship with Epic has always centred on making great games and delivering great experiences for players and developers. We look forward to continuing to work with them on this shared vision,” Tencent said in an emailed statement.
Beyond Fortnite, Epic Games is also known as the developer of the Unreal Engine, a groundbreaking 3D video game engine.
The North Carolina-based Epic Games is privately held, but Tencent holds a minority stake in the company among its “equity investments” in other video game and media companies, according to the Justice Department.
Other Epic Games investors include Sony, Disney, Fidelity and BlackRock.
Tencent, one of the largest multimedia companies in the world, is incorporated and domiciled in the Cayman Islands but has its headquarters in China’s Shenzhen.
The Justice Department’s statement did not mention any national security concerns around Tencent or its Chinese ownership, in contrast to the US government’s approach to other Chinese tech companies, such as ByteDance, which owns the social media platform TikTok.
The video-sharing app is due to be banned in the US from January 19 if its Chinese owner ByteDance does not sell the platform.
Following the investigation, Tencent decided to “amend its shareholder agreement with Epic to relinquish its unilateral right to appoint directors or observers to the Epic board in the future,” according to the Justice Department.
The statement also said that despite the resignation of the two unnamed directors, “no company or individual has admitted to liability in connection with this investigation”.