In a recent legal development, Citizen Power Initiatives for China has filed a consumer class action complaint against Tencent America LLC and Tencent International Service Pte. Ltd., collectively known as Tencent. The complaint was filed in the Court of Appeal of the State of California, Sixth Appellate District, on May 20, 2024. The plaintiffs accuse Tencent of aiding the People's Republic of China in monitoring and censoring communications on its social media application, WeChat.
Citizen Power Initiatives for China, a nonprofit organization dedicated to advancing democracy in China, along with six anonymous WeChat users residing in California, allege that Tencent's practices violate several statutory provisions and constitutional rights. According to the complaint, WeChat holds an "effective monopoly" on electronic communication within the Chinese-speaking world. The plaintiffs claim that Tencent turns over private user data to the Chinese government, enabling surveillance and censorship that leads to unfavorable content being removed and accounts being blocked. They further allege that users are sometimes investigated, detained, and punished by the Chinese government due to intercepted communications.
The plaintiffs categorize Tencent's unlawful conduct into two main areas: "challenged practices" that profit from politically motivated censorship and surveillance favoring the Chinese Communist Party (CCP), and "challenged provisions" in Tencent’s terms of service and privacy policy which they describe as oppressive and incoherent. The complaint quotes various sections from Tencent's written policies including their online “WeChat Help Center,” privacy policy, and terms of service from 2018. These policies are said to be vague and ambiguous, leaving California WeChat users unclear about their privacy rights.
The plaintiffs seek certification of a class of California-based WeChat users and bring forth eleven causes of action. They request a declaratory judgment deeming the challenged provisions unlawful, injunctive relief to prevent user data from being used for censorship or surveillance improvements by WeChat, and any other relief deemed proper by the court.
Tencent responded by moving to compel arbitration based on an arbitration clause included in its 2018 terms of service. However, none of the plaintiffs had expressly agreed to this clause since they created their accounts before its inclusion. Despite this lack of explicit consent, Tencent argued that continued use of WeChat constituted assent to be bound by revised terms under equitable estoppel principles because the claims were intertwined with those terms.
The trial court initially denied Tencent’s motion to compel arbitration but upon appeal (case No. H049519), it was determined that plaintiffs are equitably estopped from contesting assent due to their reliance on parts of the 2018 terms for their claims. Consequently, this order was reversed with instructions for further proceedings regarding arbitrability issues such as unconscionability and public injunctive relief under McGill v. Citibank.
The second appeal (case No H049717) concerning another motion invoking earlier terms requiring arbitration before Hong Kong International Arbitration Centre was dismissed as moot following this decision.
Grover acting as Presiding Judge alongside Judges Lie and Bromberg overseeing case numbers H049519 and H049717.