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Summary
- China’s antitrust body the State Administration for Market Regulation, ordered tech conglomerate Tencent and its affiliated companies to give up its exclusive music licensing rights
- The SAMR also fined Tencent up to 500,000 yuan and ordered any exclusive deals to be dissolved within 30 days.
- The move comes amid China’s ongoing crackdown on several tech giants such as Didi, Alibaba and others citing anti-monopoly rules.
China’s competition watchdog ordered Chinese tech conglomerate Tencent Holdings Ltd and its other affiliated companies to give up its exclusive music licensing rights on Saturday.
The antitrust regulatory body, the State Administration for Market Regulation (SAMR), said that Tencent and its affiliated companies must end any music related agreements within 30 days and can no longer undertake any deals related to exclusive music in the online market.
This Tencent news is the latest move in China’s ongoing crackdown on tech companies.
Tencent ruling
The SAMR also ordered a fine of 500,000 yuan (US$ 77,340), citing violations in its acquisition of China’s leading music streaming firm China Music Corporation (CMC).
The SAMR had started a probe into the tech conglomerate Tencent earlier this year after market reports emerged that Tencent had bought CMC in July 2016. The antitrust regulatory body stated this was the first ruling in the country, where they undertook necessary action under China’s antitrust law.
Tencent will be required to report on their progress every three years, and the SAMR will oversee the implementation in compliance with the antitrust law, according to the SAMR’s statement.
Tencent held a market share of over 80 per cent of China's exclusive music streaming rights following the CMC acquisition.
Tencent agreed to obey the regulator’s ruling and contribute to healthy competition in the market.
Tencent Music Entertainment Group’s ADR closed at USD 10.46, down by 2.97 per cent on 26 July 2021.
Also Read: Alibaba Fined A Record $2.75 Billion By Chinese Authorities
Chinese crackdown on tech giants
China has increasingly been clamping down on its tech giants. Chinese regulators announced a cybersecurity review into ride sharing app Didi in early July, just two days after it floated an initial public offering (IPO) on the New York Stock Exchange.
Moreover, Chinese antitrust regulators, SAMR had also fined e-commerce giant Alibaba 18.23 yuan (US$ 2.8 billion) due to anti-monopoly measures in April this year. SAMR had begun its probe into Alibaba in December 2020.
Earlier, Ant Group’s record US$ 34.5 billion IPO was suspended in November 2020 due to trivial issues like the group not meeting information disclosure requirements and other factors. Ant Group was planning to launch its IPO in Shanghai and Hong Kong. Ant Group’s controller Jack Ma, and its other senior executives were also interrogated by regulators.
Reports also emerged recently of China not wanting EdTech firms to be profit making. Regulators also recently stated they planned to have more oversight to protect delivery partners’ interest in delivery related tech companies.
China, earlier this month, said that it was probing into US-listed tech firms. China had summoned up to 34 firms such as Tencent, ByteDance and others in April as part of its anti-monopoly rules.
Also Read: Chinese suspension of Didi app weighs on APAC markets
