The company behind China’s most popular mobile application has retained a New York-based international law firm to help shape a vaguely worded edict from President Donald Trump that threatens the heart of Chinese commerce and social life.
Tencent Holdings hired Paul Weiss Rifkind Wharton & Garrison to lobby on “implementation of WeChat Executive Order of August 6, 2020.” The registration was effective Aug. 7.
Paul Weiss has to date registered only one lobbyist on the account: Roberto Gonzalez, a former associate White House counsel for financial reform and homeland security issues under President Barack Obama. Gonzalez also served as deputy general counsel for the Treasury Department under Obama. He did not respond to a request for comment.
The registration comes as the Trump administration has been cracking down on Chinese technology companies it accuses of stealing US intellectual property and endangering users’ privacy. In a pair of executive orders on Aug. 6, Trump went after both WeChat and video-sharing app TikTok, accusing them of capturing user data and censoring content opposed by the Communist Party of China.
“The spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States,” Trump said in his WeChat order. “To protect our nation, I took action to address the threat posed by one mobile application, TikTok. Further action is needed to address a similar threat posed by another mobile application, WeChat.”
Much of the attention has focused on Trump’s threat to ban TikTok in the United States, where millions of children and adults alike have downloaded the popular app. But the threat to WeChat could have much broader implications : More than a billion people around the world use the multi-purpose app for everything from messaging to consuming news to paying bills.
Trump’s order prohibits “any transaction that is related to WeChat … with Tencent Holdings” by US persons or with respect to property subject to US jurisdiction.
But the order leaves it up to the US Commerce Department to determine whether such “transactions” include individual payments by WeChat users. It’s also unclear if Tencent’s lucrative video gaming operations, the largest in the world by revenue, could also be impacted since many users pay for those services via WeChat.
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“At present, my two cents is that the EO’s impact on Tencent’s operations are largely symbolic,” said Craig Singleton, an adjunct fellow who analyzes great-power competition with China at the hawkish Foundation for Defense of Democracies (FDD). “But there’s a real risk here that the EO could be expanded to include Tencent’s gaming apps and some of their other business lines. And that would be devastating.”
Tencent has been bracing for an impact on its video-game business from escalating US-China tensions.
While this is the holding company’s first lobbying hire, Tencent-owned video game company Riot Games of Los Angeles hired Washington firm Platinum Advisors in February to lobby on data privacy and intellectual property issues. The esports promoter and maker of the wildly popular League of Legends game paid the firm $90,000 in the first half of the year to lobby Congress.
Ties between Paul Weiss and Tencent run deep.
A decade ago the firm advised the Chinese company in a “ground-breaking deal” with Groupon that marked the US e-commerce marketplace’s first investment in mainland China. Last summer, Paul Weiss’ longtime China managing partner, Jeanette Chan, left the firm after three decades to join Tencent-backed Australian fintech company Airwallex.
