What a U.S. ban on Tencent may mean for the online game industry

The U.S.-China trade war has taken another turn after U.S. President Donald Trump signed an executive order that will put an end to WeChat and TikTok transactions, halting any possibility of Americans doing business with the companies that own these apps — Tencent and ByteDance. Lately, the U..S has been especially wary of national security threats supposedly posed by Chinese social media apps, particularly TikTok which has a huge base of users in the U.S.

The consequences of banning these apps in the U.S. are hard to realize with complete clarity at this point because the factors influencing how the situation will roll out following the enforcement of these executive orders are yet to come into play — such as American companies buying these Chinese apps or the extent to which the prohibitions will be enforced in practice.

Nonetheless, considering the passing of these unusual executive orders against Chinese apps in the first place, there is clearly a potential for abuse of presidential powers on the part of the Trump administration. If these bans go beyond the transactional level, it won’t only affect users of TikTok and WeChat, but may also have serious ramifications for a huge section of the American online gaming community since Tencent is the company behind some of the most popular games played in the country.

Why does the U.S. want to ban Tencent services?

It all boils down to that oft-used yet vague term “national security.” The fears voiced by the Trump administration are that these Chinese apps like TikTok share American citizens’ data with the Chinese government.

Yet if invasive data collection practices are indeed the problem, then it’s unclear why the same aggressive stance hasn’t been taken against American tech companies like Facebook and Google that perform the same level of invasive surveillance as TikTok.

So, if you want to go by the official word, then “national security” is the motive behind the ban on Tencent and ByteDance services. The real reason is likely more political than self-defense, bearing in mind Trump’s history of sinophobic rhetoric.

The U.S. government has banned no apps or services from Chinese companies at the time of this writing. Judges blocked the U.S. government’s attempt to ban WeChat, deeming it a constitutional violation to enforce such heavy-handed bans on apps used by millions in the U.S.

As things stand, the possibility of a complete ban on WeChat is unlikely to pass through the U.S. courts. But in case these bans do take effect, things could get somewhat complicated for Tencent. Indeed, even though ByteDance’s TikTok has been the subject of most media coverage as regards the possibility of a ban and the impact of restrictions on TikTok, it is the ban on Tencent’s services that represent even deeper consequences.

This is because Tencent owns video game companies…

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