Tencent Music’s deals with major labels are under investigation

The massive Chinese company could see their grip on China’s music industry lost as an antitrust watchdog reviews their deals.

Tencent Music Entertainment represents the biggest music company in China, a subsidiary of the giant entertainment conglomerate Tencent. That position is in question as the Chinese State Administration for Market Regulation puts them under the microscope.

Tencent Music’s deals with Sony Music, Universal Music Group, and Warner Music Group are involved in the investigation. Tencent licenses the 3 major labels’ music for the whole of China exclusively so any companies or services that want to use it have to pay a sub-license.

China’s popular services like Alibaba, Baidu, and ByteDance are complaining that Tencent pays extortionate fees so that they can charge services up to double what it can cost to license directly with the labels around the world.

Universal Music Group has confirmed that they have been questioned in relation to the investigation but all major labels have declined to comment further. Warner and Sony are especially inclined to stay quiet as both have stakes in Tencent Music.

Tencent Music are claiming that the investigation isn’t real, stating: “The news has not been officially released and confirmed, and there is no accurate source or description. It’s untrue content.”

Tencent certainly seem to be amassing a monopoly in China’s tech industry. It might be for the best that Tencent’s grip over major label music in China gets looked at as their digital music industry is booming.

Head of Social Media and Marketing, RouteNote

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