In another move to clip wings of top home-grown tech companies eying global expansion, the chinese market regulator has asked Tencent to relinquish its exclusive music label rights. According to the regulator the tech company is found to have violated antitrust laws.
The ruling is also seen as a recent crackdown on China's tech sector after years of runaway growth, as experts believe that Beijing is feeling threatened over the companies' growing influence as well as the security of troves of sensitive consumer data.
Tencent acquired a majority stake in rival China Music Group in 2016, effectively controlling more than 80 per cent of exclusively held music streaming rights in the domestic market, the State Administration for Market Regulation said in a statement.
The move helped the tech giant's music arm the ability to urge labels to “reach more exclusive copyright agreements, or require better trading conditions compared to (Tencent's) competitors,” the regulator said, calling the case an “illegal concentration of business operators.”
Tencent's music arm was also fined 500,000 yuan ($77,144), SAMR said.
Chinese music streaming firms have in recent years fought to snatch up exclusive rights to play labels' tracks in the country after regulators tightened rules against piracy. The biggest players in China's tech sector — after years of growth thanks to lax regulation — are now facing increased scrutiny.
Earlier this month the financial regulator blocked a merger between video game live-streaming sites that would have given Tencent a majority stake overall, accounting for over between 80 to 90 per cent of the country's domestic market share according to analysts.
Earlier China's biggest ride-hailing app Didi Chuxing was banned from Chinese stores over data collection concerns, just days after a $4.4 billion New York IPO.