Two men on the board of directors for Epic Games have stepped down from their positions after the US Department of Justice investigated the board under antitrust laws. The pair of directors were originally appointed to Epic’s board by Tencent (who slurp upon a minority stake in the Unreal Engine company) but the United States government took a look at this and said: ah-ah-ah, you’re not allowed to have a director in your boardroom if they’re already fingers-deep in the pie of a competing company. Naughty Tencent! Naughty Epic! And, yes, naughty Riot Games!
The DoJ announced the resignations in a press release, saying they’re the result of an investigation into potential antitrust violations. The gist is: since Tencent are massive and own Riot Games outright, they aren’t allowed to have boardroom sway over Epic Games, which technically remains their competitor in the video games industry. It’d be like letting a big suitwearer at Pepsi go to all the important meetings at Coca-cola. This is all law under the Clayton Act, which “prohibits directors and officers from serving simultaneously on the boards of competitors, subject to limited exceptions.”
The two directors who’ve stepped down are Ben Feder and David Wallerstein, according to an email Bloomberg got from Epic Games confirming the resignations. Ben Feder’s job title at Tencent for years was the President of International Partnerships, and he was CEO of Take-Two Interactive before that, a big Tencent publisher. Wallerstein, meanwhile, was Senior Executive Vice President at Tencent until January this year, and is currently employed as a “senior advisor”. Neither of them should have been on the board at Epic – at least that’s what is implied by the DoJ’s investigations. And they have now stepped down, it seems, to avoid Tencent and Epic any further heat.
“No company or individual has admitted to liability in connection with this investigation,” say the DoJ with characteristic legal nous. They also add that Tencent has agreed to amend its shareholder agreement with Epic so that it can’t appoint directors to the Epic board in future. No more boardroom naughtiness, corpoboys and corpogirls!
Antitrust laws exist to prevent huge companies from establishing monopolies and becoming even more powerful than they often already are. In video games, we’ve seen Valve hit with an antitrust lawsuit in the past. And Microsoft was scrutinised with similar concerns by both the United States and the European Union when it made its (ultimately successful) move to buy Activision Blizzard. Big business gonna business big.