Tencent Ordered to Give Up Exclusive Music Rights in Antitrust Crackdown

Chinese tech giant Tencent must relinquish its exclusive music label rights, the market regulator said Saturday, after finding that the firm had violated antitrust laws.

The ruling is the latest in a crackdown on China’s tech sector after years of runaway growth, as Beijing frets over the companies’ growing influence as well as the security of troves of sensitive consumer data.

Tencent acquired a majority stake in rival China Music Group in 2016, effectively controlling more than 80 percent of exclusively held music streaming rights in the domestic market, the State Administration for Market Regulation said in a statement.

This gave the firm’s music arm the ability to urge labels to “reach more exclusive copyright agreements, or require better trading conditions compared to (Tencent’s) competitors,” the regulator said, calling the case an “illegal concentration of business operators.”

Tencent’s music arm was also fined CNY 500,000 ($77,144 or roughly Rs. Rs. 57,41,600), SAMR said.

Chinese music streaming firms have in recent years fought to snatch up exclusive rights to play labels’ tracks in the country after regulators tightened rules against piracy.

The biggest players in China’s tech sector — after years of growth thanks to lax regulation — are now facing increased scrutiny.

Earlier this month the financial regulator blocked a merger between video game live-streaming sites that would have given Tencent a majority stake overall, accounting for over between 80 to 90 per cent of the country’s domestic market share according to analysts.

Elsewhere, China’s biggest ride-hailing app Didi Chuxing was banned from Chinese stores over data collection concerns, just days after a $4.4 billion (roughly Rs. 32,748 crores) New York IPO.

Tencent did not immediately respond to AFP’s request for comment.