Internet giant Tencent was ordered by regulators on Saturday to end exclusive contracts with music copyright holders, contributing to increased enforcement of anti-monopoly and other regulations as Beijing tightens control over its booming online industries.
controls more than 80% of “exclusive music library resources” following its 2016 acquisition of China Music Group, the State Administration for Market Regulation said Saturday.
It said this gives Tencent the opportunity to get better terms than competitors get or limit rivals’ ability to enter the market.
Tencent Holdings Ltd., best known abroad for its WeChat messaging service, has a sprawling business empire that includes games, music and video. It is among the 10 most valuable publicly traded companies in the world, with a market cap of $680 billion.
To “restore competition in the market,” Tencent must terminate exclusive music copyright contracts within 30 days, the market regulator said in a statement. The company may not require providers to give better conditions than competitors get.
Tencent pledged on his social media account to “conscientiously abide by the decision”.
Regulators step up enforcement of anti-monopoly, data security, financial and other regulations against Tencent, e-commerce giant Alibaba Group BABA,
and other companies that dominate the entertainment, retail, and other industries.
The enforcement has damaged the stock market value of some companies. Shares in taxi service Didi Global Inc. DIDI,
which made its U.S. stock market debut last month, fell 21% after regulators announced an investigation into its “network security” and ordered the company to review its handling of customer data.
Regulators have publicly warned large companies not to use their market dominance to fend off new competitors.
Tencent was blocked by regulators on July 10 from combining its gaming platforms Douyu and Huya, as it could reduce competition.
On Wednesday, Chinese internet regulator Tencent reprimanded Alibaba, microblogging platform Sina Weibo and e-commerce service Xiaohongshu for allowing sexually suggestive stickers or short videos of children on their services.