China orders Tencent to give up exclusive music licensing
Jul 24, 2021
Beijing [China], July 25 : China's market regulator has ordered Tencent Holdings Ltd. and its affiliated companies to relinquish exclusive rights to music labels, in what appears to be yet another case of a clampdown on the multinational technology conglomerate.
China's State Administration for Market Regulation (SAMR) in a statement on Saturday said, "To restore market competition, Tencent and its affiliated companies must end their exclusive music copyrights within 30 days and stop charging high prepayment and other copyright fees."
Tencent should not demand superior treatment compared to competitors from copyright owners without justified reasons, the SAMR added. The company was also fined about USD 77,340, the SAMR statement read.
China's market regulator started a probe into Tencent in January this year after receiving market reports about the firm's acquisition of China Music Corporation (CMC) in July 2016, Xinhua news agency reported.
The market regulator said that this is the first ruling China took necessary measures under antitrust law. Those penalizing measures will help reshape the competition and lower the barrier for market entry, it said.
Meanwhile, experts believe that this development is another example of Beijing's crackdown on influential IT giants. Earlier this April, the Chinese government imposed a huge fine on Chinese e-commerce giant Alibaba Group. Later in July, the regulator had announced probe into US-listed tech firms.
Claiming a crackdown on anti-competitive practices among Chinese internet giants, Beijing has ramped up a broader effort to clean up the operations of the country's fast-growing and freewheeling tech sector.
Chinese regulators have been calling out tech companies for alleged offences, including inconsistent pricing, user privacy concerns and difficult working conditions, The Wall Street Journal (WSJ) reported.
Beijing has been infamous for using antimonopoly rules to curb the market influence of foreign firms. Tech companies have responded with pledges to be good corporate citizens.
