China antitrust: Beijing orders Tencent to end exclusive music licensing deals in a first for the country

The music arm of the Shenzhen-based company must relinquish its exclusive music rights within the next 30 days, as well as its high prepayments and other copyright fees for music content, according to a statement by the State Administration of Market Regulation (SAMR), the country’s antitrust watchdog agency, on Saturday.

“[This case] shows that when a merger deal has been completed and cannot be separated, the Chinese authorities can still intervene to restore the market to a status of relatively fair competition,” said You Yunting, senior partner at Shanghai Debund Law Firm Offices.

This is the first ruling from China’s antitrust regulator that addresses anticompetitive effects from a merger deal, setting a possible precedent for Beijing to mandate changes to business models and operations of merged business.

Tencent will still be able to retain its exclusive deals with independent artists, which should expire in three years, as well as partnerships on new releases.