Caixin
Apr 15, 2021 06:57 PM
BUSINESS & TECH

Tencent Music Chairman Resigns Amid China’s Anti-Monopoly Crackdown

Liang Zhu, Tencent Music's new CEO.
Liang Zhu, Tencent Music's new CEO.

Tencent Music Entertainment Group, China’s leading online music provider, announced a major shuffle in its top ranks touched off by the departure of its long-serving chairman, as the company repositions itself following past accusations of monopolistic behavior.

The series of moves will see Tong Tao Sang, who also goes by Dowson Tong, step down as the company’s chairman, a position he has held since 2016. He will be replaced by Cussion Kar Shun Pang, the company’s current CEO who has been in that position since 2016, according to the company’s Wednesday announcement

The CEO position will be taken over by Liang Zhu, a vice president who oversaw the popular QQ social media platform at the music company’s parent, internet giant Tencent Holdings Ltd.

“The board wishes to extend its deepest gratitude to Dowson for his distinguished leadership in driving the transformational growth of Tencent Music over the past five years,” the company said in a statement. “Dowson's personal dedication to shaping the company's overall strategy within the broader context of promoting the healthy and sustainable development of the music industry has enabled Tencent Music to thrive as the leading online music entertainment platform in China.”

The changes at the top come as Tencent Music is trying to reposition itself in China’s online music sector following past criticism of monopolistic behavior. Such criticism was leveled after the company obtained master licensing rights for China from many major global and regional music labels, effectively making it the gatekeeper for all their music in the country.

Following criticism from some of the company’s peers, China’s anti-monopoly regulator reportedly opened an investigation into Tencent Music in 2020 related to its licensing deals with Universal Music Group, Sony Music Entertainment and Warner Music Group. It later scrapped the investigation after the company modified its practices and stopped renewing such master licensing agreements, with Tencent Music publicly saying such agreements were too costly and time-consuming to manage.

Since then the company has pursued more traditional individual non-exclusive licenses, and has also signed a number of individual tie-ups with global music labels. Last year its parent bought 10% of Universal Music Group for $3.4 billion, and a half year later the two sides announced their formation of a joint venture. Last month it also announced the launch of another joint venture with Warner Music. 

As part of its transformation, Tencent Music has also turned to a number of less traditional formats such as long-form music videos, audio books, blogs and podcasts.

The huge clout wielded by China’s internet giants, most notably Tencent and e-commerce giant Alibaba Group Holdings Ltd., has attracted attention from the nation’s antitrust regulator over the last two years following years of unchecked growth for both companies. Over the weekend that campaign reached a crescendo when the State Administration of Market Regulation fined Alibaba a record $2.8 billion for monopolistic practices and ordered it to change its ways. 

Many expect the regulator could also take similar action against Tencent, which has been accused of anti-competitive behavior involving its wildly popular WeChat app that boasts more than 1 billion users and is considered an indispensable communications tool in China.

Contact reporter Yang Ge (geyang@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)

Download our app to receive breaking news alerts and read the news on the go.

Follow the Chinese markets in real time with Caixin Global’s new stock database.

You've accessed an article available only to subscribers
VIEW OPTIONS
Share this article
Open WeChat and scan the QR code