Market regulators said on Saturday that after discovering that Tencent had violated antitrust laws, Chinese technology giant Tencent had to give up its exclusive music label rights.
The ruling is the latest blow to the Chinese technology industry after years of uncontrolled growth, as Beijing is concerned about the growing influence of these companies and the security of large amounts of sensitive consumer data.
The State Administration for Market Regulation said in a statement that Tencent acquired a majority stake in rival Huale Group in 2016, effectively controlling more than 80% of the exclusive music streaming copyrights in the domestic market.
The regulator stated that this enabled the company’s music department to urge record companies to “reach more exclusive copyright agreements or require better trading conditions compared to (Tencent’s) competitors”, calling the case “the business operator’s Illegal concentration”.
SAMR stated that Tencent’s music department was also fined 500,000 yuan (US$77,144, or approximately Rs 57,41,600).
In recent years, after regulators have tightened anti-piracy regulations, Chinese music streaming companies have been struggling to obtain exclusive rights to play record company tracks in the country.
The largest player in China’s technology industry — which has experienced years of growth due to lax regulation — is now facing increasingly stringent scrutiny.
Earlier this month, financial regulators blocked a merger between video game live broadcast sites, which would give Tencent an overall majority stake, which, according to analysts, accounts for more than 80% to more than 90% of China’s domestic market.
Elsewhere, just days after the $4.4 billion (approximately Rs 32,748 crore) New York IPO, Didi Chuxing, China’s largest ride-hailing app, was banned from entering Chinese stores due to data collection issues.
Tencent did not immediately respond to AFP’s request for comment.