Two Epic Games board members have stepped down from their positions after the U.S. Department of Justice opened an antitrust investigation into Epic Games’ management. This pair of executives were originally appointed to Epic’s board by Tencent (which was slurping up a minority stake in Unreal Engine), but the US government looked at it and said, aha, you can’t do that. have an executive in your boardroom if he or she is already dipped into a competing company’s pie. Naughty Tencent! Naughty epic! And yes, naughty Riot Games!
Department of Justice announced his resignation in a press releaseclaiming that they are the result of an investigation into potential antitrust violations. The bottom line is this: because Tencent is a huge company and directly owns Riot Games, it cannot influence the management of Epic Games, which technically remains their competitor in the video game industry. It’s like letting the gigantic suit guy at Pepsi go to all the essential meetings at Coca-Cola. All of this is a law under the Clayton Act, which “prohibits directors and officers from simultaneously serving on a competitor’s board of directors, with certain exceptions.”
According to the English daily, the directors who left their positions were Ben Feder and David Wallerstein email obtained by Bloomberg from Epic Games confirming the resignation. Ben Feder served for many years as president of international partnerships at Tencent and was previously CEO of Take-Two Interactive, a gigantic Tencent publisher. Meanwhile, Wallerstein was Tencent’s senior executive vice president until January this year and is currently employed as a “senior advisor.” None of them should be on Epic’s board, at least that’s what a Justice Department investigation finds. It appears they have now relented to avoid further heat for Tencent and Epic.
“No company or individual has admitted liability in connection with this investigation,” the Justice Department states with characteristic legal nous. They also add that Tencent has agreed to amend its shareholders’ agreement with Epic so that it cannot appoint directors to Epic’s board in the future. No more rudeness in the boardroom, corpoboys and corpogirls!
Antitrust laws exist to prevent gigantic companies from establishing monopolies and making them more powerful than they often already are. In the case of video games, we have seen in the past that Valve had an antitrust lawsuit. Microsoft faced similar concerns from both the United States and the European Union when it made the (ultimately successful) move to purchase Activision Blizzard. Big business will be gigantic.
