China’s regulator has ordered Tencent Holdings Ltd. to give up its music exclusivity rights. The tech giant has been given an ultimatum of 30 days to comply with the order. The order came on Saturday, about a week after sources revealed that China’s antitrust regulator is set to take over control of Tencent Holdings music streaming arm.
Tencent Music is China’s dominant music streamer and is the country’s equivalent to Spotify Technology. To get rid of competition, Tencent had been vying for exclusive streaming rights with labels such as Universal Music Group, Sony Music Group, and Warner Music Group Corp. This attracted the attention of the State Administration of Market Regulation (SAMR) in 2018, inciting an investigation.
The move is a punitive restriction to put in check the social and economic power of China’s internet giants. The order bars Tencent Holdings Ltd. from exclusive music copyright agreements. The company was also fined 500,000 yuan ($77,150) for unfair market practices in the online music market after it acquired China Music Corporation.
The past months have witnessed increased crackdown actions against the country’s technology giants, and cryptocurrency. Alibaba, for example, got fined a record $2.75 billion for engaging in anti-competitive behavior.
The development comes not too long after the Chinese regulator announced that it was blocking Tencent’s plan to merge video game streaming platforms Huya and DouYu – the country’s biggest video game streaming services, after the State Administration of Market Regulation (SAMR) reviewed additional concessions proposed by Tencent Holdings Ltd for the merger.
About a week ago also, China’s antitrust regulator approved Tencent‘s plan to privatize Sogou Inc in a $3.5 billion deal. The deal entails Tencent buying 60% of Sogou and makes Tencent the latest Chinese company to exit U.S. markets amid tensions between China and the U.S. Tencent proposed buying out other investors last July. The approval showed that Tencent, for the first time in a while, might be on the State Administration of Market Regulation’s (SAMR) good side. The company’s shares jumped 3.8 percent after it got the approval to buy out Sogou Inc.
A few days ago, Tencent revealed plans to purchase British video game company Sumo Group in a deal that values the British company at £919 million ($1.27 billion) stating that shareholders of Sumo will receive 513 pence in cash per share and that the offer is at a 43 percent premium to Sumo’s last closing price of 358 pence.
The crackdown actions against big tech companies in China doesn’t seem like it’ll slow down soon as the SAMR is out to get companies that they think are defying antitrust laws.