Software

Trump Signs Banning Order for Tencent and ByteDance as Experts Fear the Repercussions

Written by Bill Toulas
Last updated August 7, 2020

US President Donald Trump has just signed two executive orders banning US entities from doing business with Tencent and ByteDance, coming into effect by September 20, 2020. We explained where this comes from a couple of days back and why TikTok’s clock was already ticking.

That said, ByteDance, who is the owner of TikTok, wasn’t surprised by this development. Tencent, on the other side, was pretty shocked, and they are currently reviewing the executive order to get a full understanding before the rush into any statements. At the same time, experts in the field feel that this order will have extensive negative effects on the American market.

The “scapegoat” is WeChat, a messaging, social media, and mobile payments platform that was developed by Tencent, and which has been recently accused of collecting user data and sharing it with the Chinese state. The D. Trump administration sees the app as a risk to the national security of the United States, so they feel that banning it is a necessary measure at this point.

But Tencent’s ownership of software products isn’t limited to WeChat, so the question is now buzzing among millions of people in the US: what happens with the rest?

More specifically, Tencent owns Riot Games (100%), Epic Games (40%), and also has a stake in Paradox Interactive, Discord, Reddit, Ubisoft, Activision Blizzard, Bluehole, and more. Riot Games is the home of the uber-popular MOBA game “League of Legends,” and Epic Games is the developer of Fortnite and also the Unreal Engine.

Other titles linked with these companies are Valorant, and Clash of Clans, the first being a highly anticipated title and the second being a mobile game hit. So, if business with Tencent is banned, what happens with these?

https://twitter.com/SamAugustDean/status/1291576813685108736

Some believe the order won’t affect these other companies even if they’re linked with Tencent. Others aren’t so confident giving out assurances, though. The very wording of the order includes the words “any subsidiary of that entity,” so if the Trump administration wanted to enforce bans on these other entities, they could do it.

Tencent also has stakes in Tesla and Snapchat, and the company has ongoing streaming deals with the NFL, MLB, and the NBA. The NBA deal alone is $300 million a year, so the order is bound to be challenged in court by a score of affected organizations.



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