The United States Justice Department announced this week that two directors from Fortnite and Rocket League owner Epic Games resigned from the company’s board of directors after the government agency’s Antitrust Division expressed concerns that they were also serving on Tencent Holdings board, which might be a violation of Section 8 of the Clayton Act. Tencent owns a minority interest in Epic Games.
According to the announcement, the “interlock was created because Tencent also is the parent company of a gaming competitor to Epic, Riot Games Inc.” To comply, Tencent announced that it had amended its shareholder agreement with Epic to relinquish its “unilateral right to appoint directors or observers to the Epic board in the future.”
The DOJ said that this is part of the division’s ongoing Section 8 enforcement efforts.
The directors in question (who were not named in the DOJ’s announcement) are David Wallerstein (a senior advisor to Tencent in the U.S.) and Ben Feder (a managing partner at New York-based TIRTA Ventures).
“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. “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.”
Section 8 of the Clayton Act prohibits directors and officers from serving “simultaneously on the boards of competitors, subject to limited exceptions.” The announcement also noted that, as part of this move to address concerns from the DOJ, “No company or individual has admitted to liability in connection with this investigation.”
China-based Tencent Holdings owns League of LEgends and Valorant developer Riot Games, and also has minority stakes in a number of major game developers and publishers including Activision Blizzard, Electronic Arts, and Ubisoft, among others.