Daily Management Review

Tencent Ordered By Chinese Regulator To Give Up Exclusive Rights In Online Music


Tencent Ordered By Chinese Regulator To Give Up Exclusive Rights In Online Music
Tencent Holdings Ltd will no longer be able to make exclusive music copyright agreements under orders from China's market regulator, while the company would also have to face a fine for engaging in unfair market practices in the online music market which it allegedly had started following its acquisition of China Music Corporation, the regulator said on Saturday.
In recent months, a series of antitrust measures have been implemented by Chinese regulators targeting the large tech companies of the company in particular which included imposing a record $2.75 billion fine on e-commerce giant Alibaba over alleged engagement in anti-competitive business practices.
The company would abide by the decision and comply with all regulatory requirements, said Tencent and Tencent Music Entertainment Group, the entity that was created following the acquisition.
Tencent's business practices in the online music broadcasting platform market in China, which considered music copyright is the core asset, was probed by the regulator, the State Administration of Market Regulation (SAMR) said in a notice posted on its official website.
There were reports earlier this month of the Chinese regulator set to pass an order against Tencent's music streaming arm, ordering it to give up exclusive rights to music labels over charges that the policy has been used by the company to unfairly compete with smaller rivals.
The regulator said that following the acquisition, more than 80 per cent of exclusive music library resources were at the hands of Tencent which prevented new entrants into the segment.  
“Tencent and its affiliated companies must not engage in exclusive copyright agreements with upstream owners of such rights while existing agreements must be terminated within 30 days of the regulatory notice,” SAMR said in its order.
A fine of 500,000 yuan ($77,150) was also slapped on Tencent for the anti-competitive behavior by the regulator.
The plans of Tencent to merge the top two videogame streaming sites, Huya and DouYu, would be blocked by it over antitrust concerns, the Chinese regulator had said earlier this month.