On Saturday, the State Administration for Market Regulation (SAMR) imposed a penalty of 500,000 yuan ($77,141) on the firm quoting breaches in its procurement of China Music in 2016.
Following that acquisition, Tencent holds higher than 80% of private music library resources. This presents the company with an advantage over its opponents. It can strike more exclusive deals with copyright holders, SAMR announced in a statement.
The competition watchdog filed Tencent and its affiliates to abandon exclusive music rights within 30 days and complete requirements for copyright holders to better treat the company than its rivals.
As stated in the report, Tencent will have to report to the SAMR on its course every three years. The antitrust regulator will rigorously supervise its implementation according to law.
In reply, Tencent responded that it would comply with all the regulatory requirements. They intend to fulfil their social responsibilities and add to healthy competition in the market.
Tencent will operate with partners, including Tencent Music Entertainment, to obtain those adjustments and ensure full compliance, it stated.
China’s grip on internet giants
The most advanced regulatory crackdown arrives as Beijing extends to control the power of its domestic technology companies that have sprung to become some of the most valuable companies in the world.
Tencent’s market covers WeChat — China’s most famous messaging app, games, music, and fintech services. Tencent, which is registered in Hong Kong, has a market value of approximately $656 billion.
China’s broadening suppression has extended from anti-competitive practices to data security as well as heightened investigation on Chinese companies with abroad listings in the U.S.
Just this month, Chinese regulators started a cybersecurity probe on Chinese ride-hailing service Didi days following its extensive U.S. IPO. In the past year, Beijing also struck a $2.8 billion antitrust penalty on Alibaba. They have additionally suspended Ant Group’s $34.5 billion IPO.
Lastly, in April, the SAMR gathered 34 firms, including Tencent and ByteDance, and directed them to carry self-inspections to comply with anti-monopoly rules.