Tencent Music given 30 days to give up exclusive music licensing rights

Tencent has been ordered by China's antitrust regulator The State Administration for Market Regulation (SAMR) to give up its exclusive music licensing rights. It has also been fined for unfair market practices in the online music market after acquiring China Music Corporation in 2016.

In a statement, SAMR said after investigating the tech giant's activities in the online music broadcasting platform market in China and the acquisition of China Music five years ago, as Tencent currently owns more than 80% of exclusive music library resources, such dominance offers Tencent an advantage over its competitors while it is able to reach more exclusive deals with copyright holders as music copyright is the core asset. 

SAMR said it was based on regulations to penalise Tencent. The company, along with its affiliated companies, must give up exclusive music rights within 30 days, not engage in exclusive copyright agreements with upstream owners of exclusive music rights as required by SAMR. Tencent is also required to report to the SAMR on its progress every year for three years, while the antitrust regulator will strictly supervise its implementation. 

Meanwhile, Tencent was also ordered to pay a fine of RMB 500,000 (US$ 77,130). 

In 2016, Tencent and China Music Corporation held about 30% and 40% of exclusive music library resources. After the acquisition, Tencent owns more than 80% of the rights. 

In mid-July, it was reported that Tencent Music needed to give up music labels exclusivity. The penalty is a much milder one than previous reports as Tencent previously faced a penalty of more than RMB 10 billion (US$1.55 billion) in April, according to the Hong Kong Economic Times. Reuters said this move was the latest in a series of actions to curb the economic and social power of Chinese internet giants. A number of tech giants were fined over the past few months, including a record RMB 18.2 billion fine Alibaba for abusing its market position.

Meanwhile, according to another previous report from Reuters, Huya, which Tencent holds the biggest share of 36.9%, said that it had terminated a US$5.3 billion deal with Douyu, which Tencent also owns over a third of its shares. The decision came after just two days as SAMR said it would block the deal on antitrust grounds last Saturday. Last year, Tencent announced plans to merge Huya and DouYu to streamline its stakes in the firms, which were estimated by data firm MobTech to have an 80% share in a market worth more than US$3 billion.

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