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Epic Games Board Resignations Linked to DOJ Antitrust Investigation

By  |  December 18, 2024

Two board members of Fortnite developer Epic Games have stepped down following concerns raised by the U.S. Department of Justice (DOJ) about potential antitrust violations involving Tencent, a Chinese tech and gaming giant. The DOJ cited Section 8 of the Clayton Act, which prohibits individuals from serving on the boards of competing companies, as the basis for its concerns, according to Hollywood Reporter.

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    The resignations were announced on Wednesday, with the DOJ’s Antitrust Division confirming that Tencent has also amended its shareholder agreement with Epic Games. Per the revised terms, Tencent will no longer hold unilateral rights to appoint directors or board observers at Epic in the future, according to Hollywood Reporter.

    The names of the departing board members have not been disclosed. Epic Games remains privately held, with Tencent serving as a significant investor. Tencent also owns Riot Games, the developer behind popular franchises such as League of Legends.

    Read more: Google Seeks Reversal of Antitrust Ruling in Epic Games Case

    This development is part of the DOJ’s broader efforts to address interlocking directorates under Section 8 of the Clayton Act. The statute aims to prevent individuals from holding board positions at competing firms, barring limited exceptions. The DOJ has increasingly scrutinized these arrangements, seeing them as a potential threat to competitive practices.

    Earlier this year, similar antitrust concerns led to changes at Warner Bros. Discovery, where two Newhouse family members relinquished board seats due to their roles at Charter Communications. John Malone, director emeritus of Charter, also stepped down, citing concerns over compliance with the Clayton Act.

    “Scrutiny around interlocking directorates continues to be an enforcement priority for the Antitrust Division,” said Miriam R. Vishio, Deputy Director of Civil Enforcement at the DOJ’s Antitrust Division. Vishio added that the department’s focus on Section 8 enforcement has delivered significant outcomes in recent years, reinforcing its importance in maintaining competitive integrity in the marketplace.

    Source: Hollywood Reporter.