Beijing regulator bars Tencent from rights in music


Being watched: People walking past the Tencent headquarters in Shenzhen. The regulator has fined the company for unfair market practices. ― AFP

SHANGHAI: China’s market regulator said it would bar Tencent Holdings Ltd from exclusive music copyright agreements and fined the company for unfair market practices in the online music market after its acquisition of China Music Corp.

The Chinese government has been stepping up antitrust actions in recent months against the country’s large tech companies, including a record US$2.75bil (RM11.62bil) fine on e-commerce giant Alibaba for engaging in anti-competitive behaviour.

Tencent and Tencent Music Entertainment Group, the unit created from the acquisition, said they would abide by the decision and comply with all regulatory requirements.

The State Administration Of Market Regulation (SAMR) has said it had investigated Tencent’s activities in the online music broadcasting platform market in China, in which music copyright is the core asset, in a notice posted on its official website.

Reuters reported in mid-July that the antitrust regulator would order Tencent’s music streaming arm to give up exclusive rights to music labels that it has used to compete with smaller rivals, citing people with knowledge of the matter.

Tencent held more than 80% of exclusive music library resources after its acquisitions, the regulator said, increasing its leverage over upstream copyright parties and allowing it to restrict new entrants, the regulator said.

SAMR said 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.

The regulator also ordered Tencent to pay a fine of 500,000 yuan (US$77,150 or RM326,074).

Earlier this month, the regulator said it would block Tencent’s plan to merge the country’s top two videogame streaming sites, Huya and DouYu, on antitrust grounds.

The firms – which provide videogame live-streaming services akin to Twitch in the United States – are two of the largest companies of their kind in China. Both count Tencent among their investors.

SAMR had said in a statement that a merger between Huya and DouYu would give Tencent control over the merged entity. “From the perspective of different key indicators, the total share is very substantial and the elimination and restriction of competition can be foreseen,” it had said. ― Reuters

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