Two directors of Epic Games Inc. have resigned from the board after the Department of Justice’s Antitrust Division expressed concerns that the dual board membership violated Section 8 of the Clayton Act. Both execs had been appointed by Tencent Holdings Ltd, which owns a minority interest in the games manufacturer.
Tencent will also amend its shareholder agreement to give up its unilateral right to appoint directors or observers to the Epic board in the future, the DOJ said in a press release on Wednesday.
The Clayton Act of 1914 prohibits directors and officers from serving simultaneously on the boards of competitors, a situation also known as an “interlock.” The government division said it has “unwound or prevented interlocks” in more than two dozen companies.
“Scrutiny around interlocking directorates continues to be an enforcement priority for the Antitrust Division,” said Deputy Director of Civil Enforcement Miriam R. Vishio of the Justice Department’s Antitrust Division. “Due to the hard work of our tremendous staff, our increased enforcement around Section 8 over the last few years has achieved substantial results and become part of our fabric.”
Tencent is also the parent company of Epic competitor, Riot Games.
Epic Games said that the board members “voluntarily resigned” earlier this year, according to Reuters. The empty board seats will be nominated by committees of its shareholders.
Tencent is headquartered in Shenzhen, China; Epic is based in Cary, North Carolina and Riot is based in Los Angeles.
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