Caixin
Caixin Global – Latest China News & Headlines

Home >

ABOUT US

CX Tech is Caixin Global's real-time tech news portal, featuring 24-hour news, short-form analysis, and roundups from business and tech media in China.

LATEST
France Won’t Ban But Will Discourage Use of Huawei 5G Equipment, Official Says
Trending in China: ‘Lipstick King’ Li Jiaqi Settles in Shanghai, Prompting a Rethink of ‘Talent’
Tencent Plays in U.S. With California Game Studio Launch
Trending in China: Shenzhen Thinks Only Children Should Get Paid Leave to Look After Their Parents - Cue Heated Debate
German Drugmaker BI Launches Shanghai Center to Harness Chinese Expertise
Chinese Self-Driving Truck Firm Aims to Cover Most of U.S. by 2024
Trending in China: Chinese Netizens Tell Indian Prime Minister Modi To ‘Shut The Door On The Way Out’ As He Quits Weibo
Trending in China: If You Can’t Beat Them, Join Them – Why Tencent is Laughing At Itself
Meituan Eyes Robot-Enabled Deliveries with $14 Million Investment in PuduTech
India Ban Could Hit TikTok’s Parent Company to the Tune of $6 Billion
Sina Weibo to Issue $750 Million in Bonds
Embattled Leshi Forced to Sell Smart TV, Livestreaming Trademarks
Autowise.ai and Swiss Cleaning Carmaker Launch Driverless Street Sweeper
Trending in China: How an ‘Old Godmother’ Took on China’s Internet Giant and Won
China’s IT Spending Expected to Hit $297 Billion: IDC
TikTok Moves Data Protection of European Users from U.S. to U.K. and Ireland
Trending in China: Dazed and Confused – China’s Elderly in Online Pandemic World
Alibaba-Owned Taobao Live Sacks Former Operating Head for Corruption
Tesla Supplier CATL Breaks Ground With New Battery Lab
Chinese Online Educator Zuoyebang Receives $750 Million Investment
Watchdog Probes Tencent’s Grip on China’s Giant Music Industry

By Bloomberg / Aug 27, 2019 04:50 PM / Business & Tech

Mascots of Tencent Music Entertainment celebrate the company's IPO outside the New York Stock Exchange in New York, Dec. 12, 2018. Photo: VCG

Mascots of Tencent Music Entertainment celebrate the company's IPO outside the New York Stock Exchange in New York, Dec. 12, 2018. Photo: VCG

Tencent Music Entertainment Group is under investigation by China’s antitrust authority in a review that could end exclusive licensing deals it forged with the world’s biggest record labels, people familiar with the matter said.

The State Administration of Market Regulation launched the probe in January and is scrutinizing the Shenzhen-based company’s dealings with music labels including Universal Music Group, Sony Music Entertainment and Warner Music Group Corp., the people said, asking not to be identified discussing a private matter.

The three largest record labels have all sold exclusive rights to a major chunk of their music catalogs to Tencent Music, which is controlled by social media titan Tencent Holdings Ltd. but also backed by Sony and Warner. Tencent Music then sub-licenses that content to smaller rivals, an arrangement they complain is unfair. Tencent Music pays fees that are unreasonably high and passes along much of those costs to its competitors, they say. Licensing songs from Tencent Music for use in China can be twice as expensive compared to when licensing directly from major labels for the rest of the world, one person said.

Music and video platforms, including those operated by Alibaba Group Holding Ltd., Baidu Inc. and ByteDance Inc., all have to sub-license content from Tencent Music. The regulator’s actions pose a threat to Tencent, which leveraged a billion-plus social media users to dominate a Chinese online music industry expected to be worth $30 billion by 2023. Music is now a key driver for the WeChat-operator, which is struggling to sustain growth as U.S.-China trade tensions depress its home economy.

Tencent Music, NetEase, ByteDance, Baidu and Alibaba declined to comment on the probe, which was previously reported by Capitol Forum and MLex without giving details of the pricing concerns of other platforms. The regulator didn’t respond to a fax seeking comment.

Related: Baidu Moving Out, Bytedance and Ant Marching in to Most Valuable Tech Firm Leader Board

Contact editor Teng Jing Xuan (jingxuanteng@caixin.com)

Share this article
Open WeChat and scan the QR code