China’s State Administration of Market Regulation (SAMR) is expected to require the country's music streaming market leader Tencent Holdings Ltd to give up exclusive licensing rights granted by record labels, according to a Reuters report, based on two people with knowledge of the matter.
However, it seems that the antitrust regulator will no longer require Recent to divest from Kuwo and Kugou, and will instead fine the operator with a 500,000 yuan ($77,150) fine for "lapses in reporting the acquisitions of apps Kuwo and Kugou."
Initially, Tencent's licensing agreements with major record labels – Universal Music Group, Sony Music Entertainment and Warner Music Group – were based on exclusive territorial rights covering China. Tencent would in turn sub-license their repertoire to other streaming services.
Blocking the merger of two video platforms
The recent agreements signed by the platform and major companies no longer includes the exclusive clause. It is understood that Tencent has also contracted exclusive with some Chinese artists or labels, a situation which has been flagged by competitors.
In addition, SAMR confirmed that it intends to block Tencent Holdings' plans to merge China’s two biggest online video platform – Huya Inc and DouYu International Holdings Ltd – on antitrust grounds.
Reuters said SAMR, Tencent Holdings and Tencent Music Entertainment Group did not respond to requests for comment.
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