One of the leading online music entertainment platforms in China, Tencent Music Entertainment, has confirmed facing discriminating scrutiny from Chinese regulators even after generating massive gains in the Q1.
The company has put forth claims that it was vigorously co-operating with the watchdogs and is committed to abiding with all the laws including those related to anti-trust. Apparently, this is the first time that the Group has come out to comment on the matter.
In fact, news reports claim that Tencent Holdings, parent organization for Tencent Music, was asked by the Chinese anti-trust controllers to give up its exclusive music rights, pay fine, and also sell some of its music possessions. However, Tencent decided to remain quite on this matter.
It has been reported that the action against the company came in midst of an extensive anti-trust suppression by the country on its internet behemoths.
Speaking on the incident, Tencent Music’s Chief Strategy Officer, Tony Yip cited that in recent months, the company has received increased regulatory scrutiny from Chinese authorities and have been potentially communicating and co-operating with relevant watchdogs.
Although Yip declined to further comment on the outcome of the talks, he mentioned that Tencent Group is committed to complying with all relevant regulations and laws put forth by the regulators, even those related to anti-trust.
News of the regulatory scrutiny has had a severe impact on Tencent Group shares over the past month, with Tencent Music recording revenues down more than 14%.
Most importantly, Sony Music Entertainment, had on Monday announced digital supply pacts with Tencent Music and NetEase Cloud Music, thereby terminating exclusive arrangement with Tencent Music.
Despite the challenges being faced currently, Tencent Music was able to produce huge revenue estimates and quarterly profits on Monday, driven by a robust growth in subscription and advertising revenue from its online music streaming platform.
For the record, profit attributable to equity holders of Tencent Music surged to 926 million yuan in Q1 from 887 million yuan than in 2020.