Chinese competition authorities have ordered the tech giant Tencent to renounce the exclusivity contracts on music copyrights in compliance with antitrust rules. An order that has caused a drop of 7.72% of the price of the Chinese company’s shares.
The Administration for Market Regulation of China decided last Saturday to require Tencent adjust model of copyright authorization in the musical field and allow some exclusive authorization models to be retained under a certain form as a condition for approve the acquisition of China Music Group by Tencent in 2016.
Following the purchase of China Music Group, Tencent owns more than 80% of the musical resources exclusively, which provides the company with the ability to force the parties to reach more exclusive copyright agreements or require them to provide it with better commercial terms than its competitors.
Let’s do it
Furthermore, it has the ability to increase market entry barriers through higher advance royalty payment models, which “may have the effect of eliminating or restricting competition.”
Likewise, the Chinese regulator imposed on Tencent a fine of 500,000 yuan (65,503 euros).
The company assured that comply with the decision and strictly implement the requirements required regulations, will operate in accordance with laws and regulations, will carry out social responsibilities seriously and will maintain healthy competition in the market.