What’s new: Beijing ordered Tencent Holdings Ltd. to relinquish all their exclusive global music licensing deals within 30 days and fined the firm 500,000 yuan ($77,175) for anti-competitive practices, according to an executive punishment (link in Chinese) published Saturday by the State Administration for Market Regulation.
It comes after an official probe of Tencent’s 2016 purchase of a major stake of China Music Corp. concluded this week that the deal breached China’s Anti-Monopoly Law, given it helped the tech giant net rights to 80% of exclusive music licensed in China.
Tencent pledged in a statement (link in Chinese) that it will work with related parties to make a correction plan within the given time.
The context: Chinese regulators have been increasingly targeting unfair competition and put the rapid expansion of tech giants through mergers and acquisitions under stricter scrutiny, issuing tough guidelines and penalizing leading firms such as Tencent, Alibaba Group Holding Ltd.
The new focus on M&As comes after the regulator’s recent crackdown on the e-commerce industry’s practice of “picking sides,” or forcing merchants to do business exclusively with one internet platform service. Alibaba was hit with a record fine in April related to the practice.
Related: In Depth: China Applies Closer Scrutiny to Sprawling Tech Acquisitions
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)
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