Tencent Holdings Ltd. was ordered to give up exclusive music streaming rights and pay half a million yuan in fines, becoming the latest Chinese internet giant to be brought to heel by regulators.
Bloomberg reports an official investigation found Tencent’s 2016 acquisition of China Music Corp.’s stakes violated regulations partly because of a lack of reporting to authorities, according to a statement by the anti-trust watchdog on Saturday. The State Administration for Market Regulation required Tencent and its affiliates to waive exclusive music rights within 30 days and handed down a fine of 500,000 yuan ($77,145).
That deal had help create Tencent Music Entertainment Group, which was formed after the merger of QQ Music and China Music Corp.
The penalty levied on Tencent marks the most-direct hit to Asia’s most valuable corporation from Beijing’s escalating campaign against its tech giants. Fellow internet behemoth Alibaba Group Holding Ltd. was fined a record $2.8 billion in April for antitrust violations, while its affiliate Ant Group Co. had to scrap an initial public offering and restructure into a financial holding company. Firms backed by Tencent have also come under scrutiny: food-delivery leader Meituan is facing an anti-monopoly probe while Didi Global Inc., operator of the country’s largest ride-hailing service, was this month ordered off Chinese app stores by cyberspace regulators.
Beijing has sought to curtail the growing influence of China’s powerful internet corporations over every aspect of Chinese life from online shopping to chatting and ride-hailing.
Tencent Music has long held a commanding lead in Chinese music through exclusive rights to a major chunk of Universal Music Group, Sony Music Entertainment and Warner Music Group Corp.’s catalogs, which it then sublicenses to smaller platforms including those operated by NetEase Inc., Alibaba and Xiaomi Corp. That dominance was weakened when NetEase struck deals to directly license songs from Universal and Sony.
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