Regulators ordered Tencent to end exclusive music copyright owners’ contracts. This was in addition to increasing enforcement of anti-monopoly rules as Beijing tightens its grip on the booming internet industries.
According to the State Administration for Market Regulation, Tencent now controls more than 80% “exclusive music library resource resources” after its acquisition of China Music Group in 2016. Tencent can get better terms than its competitors or limit their ability to enter the market, according to the State Administration for Market Regulation.
Tencent Holdings Ltd. is best known for its WeChat messaging system. However, it has a vast business empire that includes music, video, and games. With a stock market worth $680 billion, it is one of the 10 most valuable publicly traded companies in the world.
Tencent must terminate exclusive music copyright agreements within 30 days to “restore competition”, the market regulator stated in a statement. Tencent is prohibited from requiring providers of music to offer better terms than those received by competitors.
Tencent stated on its social media accounts that it would “conscientiously adhere to the decision”.
Regulators are increasing enforcement of anti-monopoly and data security rules against Tencent, the e-commerce giant Alibaba Group, and other companies that have a dominant position in entertainment, retail, and other industries.
Some companies’ stock market values have been affected by the enforcement. After regulators ordered Didi Global Inc. to improve its handling of customer data, shares in the ride-hailing company Didi Global Inc. are down 21%.
Major companies have been warned by regulators not to use market dominance to stop newcomers.
Regulators stopped Tencent from combining its game platforms Douyu & Huya on July 10, on the grounds that it might reduce competition.
The Chinese internet regulator reprimanded Tencent and Alibaba, Sina Weibo, Sina Weibo, and Xiaohongshu, for allowing short videos or stickers containing sexually suggestive content to be posted on their services.