World's biggest game publisher Tencent threaten to sue US government for listing them as a Chinese military company

But are prepared to talk it out first

Yesterday, we reported that the US federal government had placed Chinese video game publisher Tencent - owner of League Of Legends developers Riot Games, Path Of Exile developers Grinding Gear and much more besides - on a list of Chinese military companies. The list in question is part of a strategy of counteracting what the US sees as the close relationship between China's armed forces and various civilian technology suppliers and research projects.

At the time of publication yesterday, a Tencent spokesperson had commented that the listing was based on a "misunderstanding". In a statement sent to RPS overnight and also published online, Tencent's chairman Ma Huateng and executive board have now said that they're prepared to get legal if the misunderstanding isn't resolved.

The statement in full is rather robotic, and mostly just fleshes out the spokesperson's previous argument that Tencent is not, in fact, involved with anything military. It further argues that Tencent is not a "military-civil fusion", in response to the US defence department's standing claim that China's armed forces rely on "technology and expertise" provided by Chinese "companies, universities and research programs" that "appear to be civilian entities".

"As the Company is neither a Chinese military company nor a military-civil fusion contributor to the Chinese defense industrial base, it believes that its inclusion in the [Chinese Military Company] List is a mistake," the statement reads. "Unlike other lists maintained by the U.S. Government for sanctions or export control measures, inclusion in the CMC List relates only to U.S. defense procurement, which does not affect the business of the Group."

The statement also specifies that the "CMC list" - which was introduced under the first Trump presidency, and is known inside the US government as the Section 1260H list - is distinct from another document, the Non-SDN Chinese Military-Industrial Complex List, maintained by the US Office of Foreign Assets Control. The point being that "inclusion in the CMC List will not prohibit any persons (other than the Department of Defense) from business dealings with the Company, including transacting in the securities of the Company".

Tencent are about "to initiate a Reconsideration Process to correct this mistake", during which they "will engage in discussions with the U.S. Department of Defense to resolve any misunderstanding, and if necessary, will undertake legal proceedings to remove the Company from the CMC List."

If it comes to a lawsuit, Tencent won't be the first Chinese company to go to court over their inclusion on the US federal government's list of "military-civil fusions". As reported by Reuters, drone maker DJI and Lidar maker Hesai Technologies sued the Pentagon last year over their designations, though they're still on the list for the moment.