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July 26, 2021

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No exclusive music rights for Tencent

CHINA’S market regulator on Saturday said it would bar Tencent Holdings Ltd from exclusive music copyright agreements and fined the company for unfair market practices in the online music market after its acquisition of China Music Corporation.

Tencent and Tencent Music Entertainment Group, the unit created from the acquisition, said they would abide by the decision and comply with all regulatory requirements.

The State Administration of Market Regulation said it had investigated Tencent’s activities in the online music broadcasting platform market in China, in which music copyright is the core asset, in a notice posted on its official website.

Tencent held more than 80 percent of exclusive music library resources after its acquisition of CMC in July 2016, the regulator said, increasing its leverage over upstream copyright parties and allowing it to restrict new entrants, the regulator said.

The regulator said Tencent and its affiliated companies must not engage in exclusive copyright agreements with upstream owners of such rights, while existing agreements must be terminated within 30 days of the regulatory notice.

Tencent should not demand superior treatment compared to competitors from copyright owners without justified reasons, it added. The regulator also ordered Tencent to pay a fine of 500,000 yuan (US$77,150).

This is the first ruling since China took necessary measures to restore market competition since the introduction of antitrust law.

Those penalizing measures will help reshape the competition and lower the barrier for market entry, it said.

It is also conducive to reducing operation costs, nurturing new market players, providing a fairer competition environment for existing companies and safeguarding consumers’ rights of choice, it added.




 

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