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Tencent Joins WeChat Lawsuit in Limited Fashion to Protect ‘Confidential Business Information’

In a court filing on Tuesday, Tencent Holdings’ outside counsel said that it would join the lawsuit against President Donald Trump’s executive order to ban its multipurpose chat app, WeChat. Tencent informed counsel representing the US WeChat Users Alliance that it would stipulate to the court which parts of the court records that could be deemed confidential and should be redacted from the public record, and parts that could be made public.

“On October 29, 2020, Tencent’s outside counsel informed the parties that Tencent decided to move to intervene in the litigation for the limited purpose of maintaining the sealing of its confidential business information (CBI), and explained the bases for Tencent’s position,” the filing read, in part. “Tencent’s outside counsel also indicated certain redactions it would propose lifting.”

Counsel for the US WeChat Users Alliance went on to ask that it be relieved or responsibility related to confidential business information because Tencent “will be responding to that order on its own.”

In late October, US Magistrate Judge Laurel Beeler solicited input from the US WeChat Users Alliance, the Justice Department, and Tencent to help determine what information could be made public. In September, Beeler issued a preliminary injunction against the government’s ban.

Some reporting indicated that Tencent would officially take part in the case alongside the US WeChat Users Alliance (who filed the lawsuit against the government in August), but it appears the scope of that participation will be limited. Tencent has been silent about the ongoing lawsuit since it began and has not responded to multiple requests for comment. 

Tencent is a major player in the entertainment, esports, and gaming industries in the United States and around the world; it owns Valorant and League of Legends maker Riot Games, holds a large stake in Fortnite maker Epic Games (which in turn owns Rocket League maker Psyonix), and has small investments in companies such as PUBG owner Krafton Inc., Call of Duty League and Overwatch League owner Activision Blizzard, and Rainbow Six Siege maker Ubisoft.

The WeChat lawsuit (and the ongoing TikTok legal fight) matters because it is about a Chinese company being sanctioned by the U.S. government for doing business within the United States under the guise of “national security” concerns. If successful, the government could apply these same standards to other Tencent-owned companies such as Riot Games, and in concert with an order from the U.S. Treasury’s Committee on Foreign Investment in the U.S. (CFIUS), the company could be ordered to divest itself of any financial interests in U.S.-based companies. 

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