UPDATE (Wednesday, August 14, 2019 at 5.39pm CST): Tencent Music has come out in response to reports that it is under an anti-monopoly investigation. The company said that the reports are untrue, have not been officially announced and cannot be verified.
With disappointment still palpable after the release of Tencent Music Entertainment’s (TME) earnings for the second quarter of 2019, it seems like things are bound to get worse for the company. Reports have come out this week that the State Administration of Market Supervision and Administration are carrying out anti-monopoly investigations into TME.
MLex, a market insight company, reported that Warner Music, Sony Music and Universal Music have been questioned by the aforementioned state body about their exclusive licensing agreements with Tencent Music.
Tencent Music’s stranglehold on music copyright in China has allowed the company to notch up the biggest song library in the country, and concerns have been rife that its activities represent unfair market competition for competitors like Alibaba, Xiaomi, Netease and Apple.
The report from MLex states that this is the first time any of the big three tech companies in China (Baidu, Alibaba and Tencent) has been investigated for unfair market competition.
Tencent also happens to be the parent company of WeChat, which has previously been accused of cornering the social media market by unfair means. As reported by South China Morning Post, the company blocked links from three rival social media apps from opening in WeChat in January of this year.
Earlier this week, it was revealed that Tencent Music Entertainment (TME), which is listed on the New York Stock Exchange, recorded just a 2.9% rise in net profit year-on-year for the second quarter. Stock in the company dipped 8% hours after the report was published, according to Caixin Global.
Tencent is also in talks with Vivendi to buy as much as a 20% stake in Universal Music Group, the world’s largest record label. Tencent Music has previously used its wealth of music copyright to buy its way into Douban FM, an alternative music streaming site based in Shenzhen, earlier this year.
[Cover image via Pixabay]