The esports industry took a deep breath on August 6 when United States President Donald Trump signed an executive order that prohibited certain forms of transactions on the WeChat app, owned by Tencent, the company that also owns companies that operate some of the world’s biggest esports games.
The ban, which is due to come into effect on September 20, is focused mainly on the WeChat app and it seems that none of the Tencent esports titles, such as Valorant, League of Legends, and Fortnite, will be affected by the ban. However, that is not to say that the President could then target those particular games in a future order if he deems it necessary.
The President has long believed that Chinese tech companies are harvesting and snooping on US consumers and data and he has viewed this as a matter of national security. In addition to targeting the WeChat app, President Trump has also got the popular video social network app Tik Tok also in his sites.
Confusion about the future of esports gaming with Tencent games was initially caused by the wording of the initial statement, which initially suggested that all Tencent properties would be included in the ban. However, a subsequent report and release of additional information clarified that it would just be the WeChat service that would be subject to a ban, much to the delight of millions of US-based gamers and those whose livelihoods depend on esports gaming.
Prospect of Legal Action as Market Value Drops
Now that the situation has been clarified and while the impact on esports gaming on titles like Fortnite, Valorant, and League of Legends is likely to be negligible, if there is any impact at all, the same cannot be said for the share price of Tencent. After news of Trump’s Executive Order broke, shares in the company plummeted and roughly a total of USD$54 billion was wiped off the value of the company.
That 7.9% fall in value is directly attributable to the order issued by Trump, although when the White House later clarified that the restrictions would only affect WeChat, the shares rallied to recover 3% of those losses (USD$20 billion).
While Tencent have remained silent on any action they plan to take regarding the order, ByteDance, the owner of TikTok, have issued a fiery statement on Friday stating their intention to fight the order.
In a lengthy statement, the company accused the US Government of not cooperating with them and has accused the President of taking away its legal obligation to due process.
“We will pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly – if not by the Administration, then by the U.S. courts.”
Whatever happens in the coming days, it seems that another spat between the US Government and China, this time in the form of some of its leading tech companies, is on the horizon.
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