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The Chinese communist government has cracked down on multinational technology conglomerate holding company – Tencent Holding Ltd – in a stated goal of restoring fair competition in the market.
The State Administration for Market Regulation (SAMR) on Saturday imposed a fine of CNY500,000 (US$77,141) on the company, on allegations of violations in its acquisition of China Music in 2016. The regulator alleged that, after acquisition, the company had cornered “80% of the exclusive music library resources”.
The competition watchdog ordered Tencent and its affiliates to surrender its exclusive music rights within 30 days, and to put an end to requirements for copyright holders to grant the company better treatment than to its competitors.
In a statement, SAMR said: “Tencent will report to the State Administration of Market Supervision on the performance of its obligations every year for three years, and the State Administration of Market Supervision will strictly supervise its implementation in accordance with the law.”
In response to the action, the Tencent said that it would comply by all the regulatory requirements.
Worth nearly US$656 billion, Tencent, which is listed in Hong Kong, is China’s most valuable company as on date. Tencent’s business includes WeChat — China’s most popular messaging service, games, music and fintech services.
The latest regulatory crackdown on a tech company comes as Beijing continues to curb the power of its home-grown tech firms that have grown to become some of the most valuable companies in the world.
The communist government’s clampdown has ranged from anti-competitive practices to data security and increased scrutiny on Chinese firms with overseas listings in the US.
Earlier this month, Chinese regulators launched a cybersecurity probe on Chinese ride-hailing service Didi just days after its successful IPO in the US. Last year, the Chinese government had also slapped a US$2.8 billion antitrust fine on Alibaba – a move after which company’s shares tanked and ceded its most valuable Chinese firm slot to Tencent. The country had also suspended Ant Group’s US$34.5 billion IPO.
In April, the anti-trust regulator had summoned 34 companies – including Tencent and ByteDance – and ordered them to conduct self-inspections in a bid to comply with anti-monopoly rules.
