(CelebrityAccess) — China’s anti-trust authorities are preparing to order Tencent Music to give up its exclusive deals with major labels, according to a report by Reuters.
The State Administration of Market Regulation is also weighing a fine of 500,000 yuan ($77,150) for lapses in financial reporting related to the acquisition of two of its music streaming apps, Kuwo and Kugou, sources told Reuters.
The move, if it comes to fruition, would be the latest in a series of measures intended to curtail the power of China’s e-commerce giants, which had previously been loosely regulated.
However, the enforcement action under consideration is less dire than the SAMR’s previous approach. In April, Reuters reported that the SAMR was considering requiring Tencent to sell Kuwo and Kugou and imposing a fine of at least 10 billion yuan over the acquisitions.
Tencent Music has also sought exclusive streaming rights with majors such as Warner Music Group, Universal Music Group and Sony Music Group in a bid to control the streaming market. The company agreed to not renew some of those deals, which typically expired in three years, amid expanded regulatory scrutiny in April, Reuters reported.
Tencent Music is the dominant streamer in the Chinese market, operating the streaming apps QQ Music, Kugou, Kuwo, and WeSing with an estimated 660 million monthly users representing approximately 60% of market share.