Chinese multinational technology company Tencent Holding Ltd. (HKG: 0700) will be denied online music rights by China’s market regulator regulator, The State Administration of Market Regulation (SAMR).
The regulator says it will ban Tencent from exclusive copyright agreement and slap the company with fines for unfair market practices in the online music market.
Among the accusations being leveled against Tencent include purchase of China Music Corporation by the company. After the deal was closed, Tencent created a unit from the acquisition and named it Tencent Music Entertainment Group.
The company says it will abide by all the regulatory requirements to the latter. In recent times, the SAMR has been tightening antitrust actions against big tech companies in China. The regulator it carried out a probe on Tencent’s activities in the online music broadcasting platform market in China before making conclusions.
SAMR says after the acquisition Tencent hold more than 80% of exclusive music library resources. This huge ownership stake increases the company’s leverage against upstream copyright parties further giving the company ability to restricts new entrants.
Insider sources have leaked information that the regulator will push Tencent’s music streaming to surrender exclusive rights it has been using to edge out small rivals to music labels.