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China to command Tencent Holdings Ltd (OTCMKTS: TCTZF) to Give up Music Tag Exceptionality

China’s competition ombudsman is determined to command the music streaming member of Tencent Holdings Ltd (OTCMKTS: TCTZF) to give up special rights to music tags used to compete with lesser rivals.

SAMR to fine company 500,000 Yuan

The State Administration of Market Regulation will also order the company to pay a fine of 500,000 Yuan ($77,150) for hiatuses in registering the purchases of apps Kuwo and Kugou, a slighter consequence than the compulsory sale designated previously this year.

The step is the newest in a clamp-down to control the financial and social control of China’s once-loosely controlled internet titans. The movement, which initiated late last year, has encompassed the highest 18 billion Yuan fine on e-commerce firm Alibaba Group Holding Ltd for mistreating its market location.

In April, Reuters stated that SAMR meant fine Tencent Holdings at least 10 billion yuan and that the social media front-runner was petitioning for compassion. Reuters also conveyed that SAMR had communicated to Tencent Music it may have to flog Kuwo and Kugou.

As an alternative, SAMR will no longer necessitate a sale but will levy the maximum 500,000 Yuan fine for not correctly highlighting the 2016 app acquisitions for antitrust appraisal.

SAMR to Block Tencent plan to merge Huya Inc and DouYu International Holdings Ltd

SAMR has also stated that it would block Tencent Holdings’ strategy to combine China’s two biggest videogame streamers – Huya Inc and DouYu International Holdings Ltd – on an antitrust basis.

Tencent Music, China’s correspondent to Spotify Technology SA, followed special streaming rights with tags including Universal Music Group, Sony Music Group, and Warner Music Group Corp to fend off competition.

It developed the topic of a SAMR examination in 2018, which stopped the next year after the company agreed not to repeat some of its special rights, which usually finish after three years. It nonetheless kept special rights to music from some performances, including Jay Chou, one of the Chinese-speaking domain’s most significant performers.

After SAMR’s newest decision, Tencent Music will at least maintain rights to music from some internal indie performances. However, losing special rights means Tencent Music will likely have to intensify efforts to shape a more collaborative and energetic community to involve its consumers. 

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