Last month, the Trump administration announced it would ban Tencent‘s (OTC:TCEH.Y) messaging app WeChat in the U.S. However, the effort to enforce that ban beginning last week was halted by a preliminary injunction in a California district court.
The judge ruled that the ban raised concerns about the First Amendment rights of WeChat’s users, the U.S. government’s limits on controlling businesses, and the harm it could do to Chinese users in America. The injunction will allow a new lawsuit against President Donald Trump, filed by the U.S. WeChat Users Alliance (which isn’t affiliated with Tencent), to proceed.
The Trump administration’s moves against WeChat wouldn’t have significantly affected Tencent, since only a small percentage of the app’s users are located in the U.S. However, the Trump administration is now increasing its scrutiny of Tencent’s gaming investments in the U.S. — which could matter a lot more than its WeChat users.