Tencent GC: Chatty man

Taking his Silicon Valley expertise to Chinese internet giant Tencent, GC Brent Irvin is helping the company take on the digital status quo with the likes of WeChat

Although based in Shenzhen, a technology hub in southern China, Tencent’s general counsel Brent Irvin finds himself travelling frequently, as the Chinese internet giant flexes its muscles beyond national borders. Irvin’s most recent trip was to the US, as his company promoted its mobile messaging app, WeChat, to the global market.

A competitor to WhatsApp, WeChat is an app for smartphones that allows users to send free texts, voice messages, images and videos. Irvin is a regular user, but free texts is not the only reason for his loyalty.

“Lawyers need to be close to the business,” he says. “I use all Tencent’s products because it’s part of my job to know them well.”

For junior lawyers this means doing their duty can be fun. Irvin points out that as part of the training programme new staff members spend days just playing the online video games developed or distributed by the company.

IrvinBig

Points East

Founded in 1998 the Shenzhen-headquartered and Hong Kong-listed company has seen exponential growth in recent years. As of 30 August Tencent had a market capitalisation of $87bn (£55bn).

To Irvin, previously a Silicon Valley lawyer working in a US technology law firm, an internet and technology giant based in China offered an exciting opportunity. In 2009 he left his position as an associate in the Palo Alto office of Wilson Sonsini Goodrich & Rosati to take up the role of general counsel at Tencent in Shenzhen.

Since then Irvin and his in-house team have been involved in many of the company’s cross-border transactions including its acquisition of a 10 per cent stake in Russia’s internet company Digital Sky Technologies for $300m in 2010; the acquisition of a majority stake in Riot Games for $400m in 2011; and, most recently, a strategic investment in Activision Blizzard and collaboration agreements with Hollywood studios such as Warner Bros, Universal, Miramax and Lions Gate.

“Working in a Chinese internet company is not hugely different from working in a US one – issues facing the general counsel are similar, such as antitrust, liability for open platform third-party apps, copyright infringement and government-related issues, but there are differences around how to resolve these issues,” says Irvin.

“They’re also facing the same challenge. In both countries, law is playing catch-up with the internet. Leading internet companies are usually the first to test the law and set precedents that can affect the industry. It’s never boring.”

An example of Tencent’s role in helping to shape China’s internet law is its high-profile online monopoly dispute against Chinese antivirus software developer Qihoo 360. In April the Guangdong Higher People’s Court handed the first instance win to Tencent, represented by a team of in-house litigation lawyers, and ordered Qihoo, represented by King & Wood Mallesons’ China head of antitrust Susan Ning, to pay compensation of RMB5m. It is one of the first internet-related antitrust litigation cases in China and one of the first major disputes between large internet companies.

In a bid to share best practice in the industry and encourage research into the legal issues on the industry’s frontiers, Tencent’s legal department launched the Tencent Cyber Law Research Centre two years ago. This has now become the primary forum for legal practitioners and academics, including some from the US.

Understanding the business

Irvin knows the key to his success as group general counsel is to have a capable team and trust them to do the tasks. Tencent’s legal department has 105 staff grouped into six main teams focusing on servicing particular business units such as media, e-commerce and games, or a certain practice area such as IP or litigation. The six team leaders report directly to Irvin.

Most in-house legal staff are based in the company’s headquarters in Shenzhen, while there are four in Shanghai and 12 in Beijing. There are also lawyers based overseas, with four in Hong Kong and two in the US. Among the lawyers based in China, 15 work extensively on international matters and around half have qualifications or work experience outside China.

Irvin’s near-native proficiency in Mandarin means there is no language barrier between him and his team, and 80 per cent of the time the team’s working language is Chinese.

“I’ve structured the legal department according to what I saw in Silicon Valley,” he says. “Teams need to be close to the products and businesses, and develop deeper understanding of the internet space and technologies as things move quickly in this industry.”

As the company’s business ventures and market shares grow in parts of the world such as Brazil, India and Korea, Irvin is considering adding lawyers in these countries next year.

Although the in-house department has been growing fast, Irvin also values the role of external advisers such as Davis Polk & Wardwell, Morrison & Foerster, Paul Weiss and Wilson Sonsini.

“We use a deep roster of law firms, not only California, New York and London firms but also local ones across a range of jurisdictions – China, Hong Kong, Korea, India and Brazil to name but a few,” says Irvin. “But when we outsource work our internal team is always involved. We never hand out cases to external firms completely.”

One requirement for Tencent’s external counsel is an in-depth understanding of the company’s products and technologies. In other words, lawyers wanting to work for Tencent, if you have not yet downloaded WeChat, it would be advisable to do so.

Brent Irvin, Tencent

Position: Vice-president and general counsel

Reporting to: Management committee

Revenue: RMB43.9bn (£4.6bn)

Total legal capacity: 100+

Main external law firms: Covington & Burling, Davis Polk & Wardwell, Jun He, Morrison & Foerster, Paul Weiss, Wilson Sonsini and boutique Chinese litigation firms

Steven Liew, associate GC, head of govt relations, Asia Pacific, eBay 

Liew

The extent to which internet intermediaries should be liable for content is under scrutiny. Across Asia we are seeing this as an emerging issue affecting the regulation of the internet and we need clear and balanced guidelines concerning responsibilities as they apply to these intermediaries.

The EU e-commerce directive stipulates the information that internet companies need to provide to consumers, how contracts are formed and, importantly, what internet service providers are or are not liable for. And this is consistent across the union.

Over the years we have been asked by governments to remove items listed for sale on our eBay site that are alleged to have violated local laws. We have complied with such requests if we agree with the particular government’s position. 

However, there are inevitably some requests with which we have difficulty complying, as they are against our corporate values and/or US laws. 

This sort of dilemma puts the issue of intermediary liability front and centre, not just for our company but for any internet company that can be deemed to be an intermediary.

Another area under scrutiny is the role of ISPs (internet service providers). Some of their users have been accused of infringing copyright by downloading or uploading pirated content such as movies.

In Australia, ISP iiNet won a court case in the High Court holding that iiNet did not authorise its customers to  breach copyright online. 

This situation was described to me as being like a highway owner – is the owner responsible for how people drive on the road or for the maintenance, safety and upkeep of the highway? In this instance, the internet platform is the highway and the drivers the customers and consumers.

Which brings me to my point: laws are needed to set guidelines with regard to responsibilities, particularly as they apply to intermediaries on the internet.

The issue should not be, who is responsible for the consumer but rather what policies and procedures does the intermediary have for addressing potentially unlawful issues? What system do they have when notified? How do they protect consumers?

Change must begin with better understanding on the part of governments of the challenges that those in our industry face, and a recognition of the significant economic opportunity these internet platforms represent for economies across Asia.

Sassoon Grigorian, eBay’s Asia Pacific head of policy, is the co-author of the article