Chinese multimedia conglomerate Tencent Holdings is one of the largest companies in the world and owns hundreds of brands and subsidiaries, including WeChat. With over a billion active users, WeChat serves as China’s primary messaging app, social media platform and payment app all rolled into one platform. But WeChat, like ByteDance’s TikTok, has come under heavy scrutiny over concerns of user privacy and national security.
Over the last three years, Tencent has spent $6.3 million lobbying the federal government. Tencent began spending on federal lobbying in 2020, the same year former President Donald Trump signed executive orders banning WeChat and TikTok in the United States.
While WeChat has become a staple of everyday Chinese life, the app reportedly became pivotal to Beijing’s surveillance and censorship apparatus. Human rights groups including Human Rights Watch have warned the Chinese government has used WeChat to monitor citizens, spread propaganda and crush dissent.
Collaboration between Tencent and the Chinese government has caused concern over the data of international users, leading Trump to attempt to ban WeChat.
“Like TikTok, WeChat automatically captures vast swaths of information from its users. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information,” reads Executive Order 13943.
The order was signed in August of 2020. Tencent ramped up its lobbying spending to $840,000 in the third quarter of 2020, an increase of 1,767% from the $45,000 it spent in the second quarter of that year.
In late September 2020, Magistrate Judge Laurel Beeler blocked the order on First Amendment grounds, saying “there are no viable substitute platforms or apps for the Chinese-speaking and Chinese-American community.”
In the fourth quarter of 2020, Tencent spent another $594,000 in lobbying, totalling about $1.5 million over the year.
In 2021, Tencent continued lobbying the federal government, spending $2.5 million over the course of the year, an annual increase of 64%. In June, President Joe Biden revoked the bans by executive order, instead directing the Department of Commerce to conduct national security reviews.
“The Federal Government should evaluate these threats through rigorous, evidence-based analysis and should address any unacceptable or undue risks consistent with overall national security, foreign policy, and economic objectives, including the preservation and demonstration of America’s core values and fundamental freedoms,” states Executive Order 14034.
Last year, Tencent spent another $2.3 million on lobbying. The agencies it lobbied include the Commerce Department, the State Department, the National Security Council, the Office of the U.S. Trade Representative and the Executive Office of the President. Today, WeChat is still available for download in the U.S.
Tencent declined to comment on its lobbying efforts.
Tencent amasses video game empire through acquisitions
Tencent has also spent the last few years growing its entertainment empire, particularly in the video game industry. Through its investments and acquisitions, Tencent has become the largest video game company by revenue.
Tencent owns shares in some of the largest western video game companies, including French developer Ubisoft. Tencent owns 40% of U.S. Fortnite developer Epic Games, which had a 2022 valuation of $32 billion. The holding company also entirely owns Funcom, Clash of Clans developer Supercell and Riot Games, the developer of League of Legends and Valorant. Over the last year, the Chinese multimedia conglomerate has continued to invest in foreign game developers and publishers, reportedly shifting to an aggressive expansion strategy in the last few months.
Increased corporate consolidation of the gaming industry isn’t unique to foreign investors. Microsoft announced its intention to acquire publisher Activision-Blizzard for $69 billion, which prompted a formal warning from the EU this week on antitrust grounds. Last year, Sony acquired Destiny developer Bungie for $3.6 billion.
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Source: OpenSecrets.org
