Two people with knowledge of the matter have confirmed that China’s antitrust regulator is poised to order the music streaming arm of Tencent Holdings Ltd to give up exclusive rights to music labels.
The order, and a 500,000 yuan ($77,150) fine are the penalties for misreporting the acquisition of two apps.
The sources say the penalties are the result of an investigation by the State Administration of Market Regulation (SAMR) into Tencent Music Entertainment Group, China’s dominant music streaming company.
The sources said that Tencent had lobbied for a more lenient penalty.
Under the terms of the penalty, SAMR will fine Tencent Music for not properly reporting the 2016 acquisitions of competing apps Kugou and Kuwo for antitrust review, an offence capped at 500,000 yuan, the sources said.
SAMR on Saturday said it would block Tencent Holding’s plan to merge China’s two biggest videogame streaming site operators – Huya Inc and DouYu International Holdings Ltd – on antitrust grounds, confirming an earlier PageOne.ng report.