Chinese regulators direct TME to give up exclusive record label rights

Chinese regulators direct TME to give up exclusive record label rights

The company will be fined $77,150 by China's SAMR for failing to disclose the purchases of applications, Kugou and Kuwo

Tencent Music Entertainment (TME), a company that develops music streaming services for the Chinese market, is being forced by Antitrust regulators in China to surrender exclusive rights to the catalogues of certain record labels in the country.

Sources claim that the expected order comes after an antitrust investigation against TME in China, where the company was investigated in 2019 for establishing exclusive license arrangements with three major record labels in the country.

Citing sources with knowledge of the matter, TME will be fined 500,000 yuan ($77,150) by China's State Administration of Market Regulation (SAMR) for failing to disclose the purchases of applications Kuwo and Kugou.

Earlier in April, China's SAMR was all prepared to fine TME with at least 10 billion yuan ($1.54 billion), along with the forced sale of its Kugou and Kuwo music applications to competitors. Now however, regulators will no longer demand a sale of Kuwo and Kugou but will levy the maximum fine of 500,000 yuan on TME for failing to report the 2016 app purchases properly for antitrust scrutiny.

TME now may or may not face additional antitrust penalties, claim reports.

About TME –

TME, the owner of China's leading music streaming services, had previously formed a partnership with Universal Music, Sony Music, and Warner Music that allowed it to license the major albums for its platforms and exclusively sub-license them to local competitors.

The company’s most recent license deal was with Universal and Warner, both announced in the last 12 months was also structured differently. Currently, TME no longer has an exclusive sub-licensing right, which allows firms like Universal Music and Warner Music to sign separate deals directly with other companies like TME's biggest competitor in China, NetEase Cloud Music.