China's antitrust regulator is set to order Tencent Holdings' music streaming arm to relinquish the exclusive distribution deals with record labels that helped it become the country's leading music streamer, according to a new report from Reuters.
The State Administration of Market Regulation (SAMR) has been investigating Tencent for antitrust violations since 2019. Tencent's music arm, Tencent Music Entertainment (TME), owns three of China's top music streaming apps: QQ, Kuguo and Kuwo, which as of December together controlled 77% of China’s monthly active users, according to Chinese research company QuestMobile.
Reuters reports that SAMR will also fine Tencent 500,000 yuan ($77,150) for not properly flagging its 2016 acquisitions of Kuwo and Kugou for antitrust review. This is somewhat of a mild penalty, given prior speculation that the SAMR might force Tencent to divest its streaming platforms.