Tencent shares fall after Beijing orders end to exclusive music rights deals

Shares in Tencent have fallen after China ordered the company to end exclusive music licensing agreements with record labels across the world.

The move is said to be aimed at tackling the technology giant’s dominance of online streaming in the country.

They must cease engaging in any of these deals in the future and any existing deals must be severed within 30 days.

Tencent has previously stuck deals with global giants such as Sony Music, Universal Music and Warner Music.

Tencent controls more than 80% of China’s exclusive music streaming rights after the acquisition of the Chinese Music Corporation in 2016.

On Saturday, the State Administration of Market Regulation (SAMR) said Tencent broke the country’s anti-monopoly rules.

Tencent and Tencent Music Entertainment, the company created out of the Chinese Music Corporation, said they will abide by the ruling and comply with the regulators requirements.

In Hong Kong, shares in Tencent Holding were down by 5.7%, while Tencent Music Entertainment Group’s shares were 6.9% lower.

This is the latest in a long line of crackdowns from Chinese authorities against some of the country’s largest and most successful tech firms.

Last week, shares in Didi, a ride-hailing app, slumped by more than 30 per cent after a report emerged alleging the regulators in Beijing were considering serious penalties against the firm.

Didi’s shares have now fallen by 40 per cent since making its New York Stock Exchange berth on 30 June.