Competition Law in Music Streaming Rights Bundling in China

Introduction

China’s online music market raises important competition-law questions because a music-streaming platform needs access to large catalogues of copyrighted songs to compete effectively. Problems can arise when a powerful platform obtains large packages of music rights and combines, or “bundles,” those rights in ways that make it difficult for competing platforms to obtain commercially important content.

Rights bundling may involve acquiring catalogues from several record companies under one licensing arrangement, combining popular and less-popular works, obtaining exclusive rights across large catalogues, conditioning access to important songs on the purchase of additional rights, or combining music-streaming rights with other platform services. Bundling is not automatically unlawful. Competition concerns arise where the arrangement has the purpose or effect of excluding competitors, restricting market access, imposing unreasonable trading conditions, or strengthening market power.

China’s enforcement approach became particularly significant after the State Administration for Market Regulation (SAMR) investigated Tencent’s acquisition of China Music Corporation. In 2021, SAMR found that the transaction had given the combined business control over more than 80% of exclusive music-library resources and imposed measures requiring the termination of most exclusive music copyright arrangements.

Legal and Regulatory Framework

The principal legislation is the Anti-Monopoly Law of the People’s Republic of China (AML). It addresses monopoly agreements, abuse of dominant market position and concentrations of undertakings that may eliminate or restrict competition.

For music-streaming rights bundling, several competition theories may become relevant.

First, agreements between platforms and copyright owners may be examined where exclusivity, tying, restrictive sublicensing or other contractual provisions substantially restrict competition.

Second, a dominant streaming platform can face scrutiny if it imposes unreasonable conditions, refuses to deal without justification, conducts tying or bundled transactions without legitimate commercial reasons, or otherwise uses its market position to exclude competitors.

Third, acquisitions involving streaming platforms, copyright catalogues or online-audio businesses can be reviewed as concentrations of undertakings. Authorities examine whether control over important content after a transaction could create or strengthen barriers to entry.

Copyright law remains important because copyright owners normally have the right to license their works. Competition law does not eliminate copyright exclusivity. Instead, it can restrict the manner in which copyright rights are accumulated or exercised when the resulting arrangements substantially damage competition.

Market Definition and Market Power

The relevant market is crucial. In its Tencent/China Music Corporation enforcement action, SAMR identified the relevant market as the online music playing platform market in China. It considered genuine music copyrights to be core assets and key resources necessary for operating such platforms.

SAMR stated that before their combination in 2016, Tencent and China Music Corporation accounted for approximately 30% and 40% of the relevant market respectively. Following the transaction, the combined undertaking controlled more than 80% of exclusive music-library resources. The regulator considered that this position could enable Tencent to obtain additional exclusive licences and better contractual conditions than competitors.

For rights bundling, therefore, authorities may examine the percentage of commercially important music controlled by a platform, the duration and scope of licences, sublicensing possibilities, switching costs, bargaining power of record labels and artists, and whether competing streaming services can obtain substitute catalogues.

Competition Problems Created by Rights Bundling

A major concern is foreclosure. If a platform obtains a bundled exclusive catalogue containing many popular artists, competitors may technically remain in the market but have difficulty attracting users because essential or highly demanded music is unavailable to them.

A second issue is raising rivals’ costs. A platform with substantial financial resources could offer large advance payments for bundled catalogues. Smaller competitors may then have to pay substantially higher licensing fees to maintain competitive catalogues.

A third concern involves preferential licensing conditions. A powerful platform might obtain bundled rights on terms that record companies cannot offer to rival streaming services.

Another concern is tying. Access to desirable music rights might be linked to other rights, advertising arrangements, distribution channels or platform services. Such arrangements require examination of market power, commercial justification and their actual competitive effects rather than being treated as automatically unlawful.

SAMR’s 2021 Tencent decision directly addressed some of these risks by requiring termination of most exclusive online-music copyright arrangements, discontinuation of high advance-payment practices and restrictions on seeking preferential conditions from copyright owners without reasonable justification.

Important Cases and Enforcement Decisions

1. Tencent Holdings / China Music Corporation — SAMR, 2021

This is the most important Chinese competition proceeding for online music rights.

Tencent acquired China Music Corporation in 2016. SAMR subsequently investigated the transaction as an unlawfully implemented concentration. The authority found that the combined business possessed more than 80% of exclusive music-library resources and could obtain additional exclusive agreements or preferential conditions from upstream copyright owners.

SAMR ordered Tencent and its affiliates to terminate most exclusive music copyright agreements within 30 days, stop certain high advance-payment practices and refrain, without legitimate justification, from demanding better licensing conditions than those offered to competitors.

The case demonstrates that control over copyright catalogues can function as a major competition variable even though copyright itself lawfully grants exclusive rights.

2. Tencent / Ximalaya — SAMR, 2026

This more recent merger proceeding demonstrates that Chinese regulators continue to examine the interaction between content rights, platform concentration and bundling.

In May 2026, SAMR conditionally approved Tencent’s acquisition of Ximalaya. SAMR concluded that the concentration could have restrictive effects in online-audio and online-music platform markets.

Among the conditions, the parties were prohibited from entering certain exclusive copyright arrangements and required to terminate existing exclusivity within prescribed periods. Importantly for bundling analysis, SAMR also prohibited the merged entity from bundling online-audio or online-music platform services when dealing with automobile manufacturers, or preventing them from purchasing competing products.

The decision illustrates that Chinese competition enforcement can address both content exclusivity and cross-service bundling.

3. Shenzhen Tencent Computer Systems v. Guangzhou NetEase and Others — Wuhan Intermediate People’s Court, 2014

Tencent sought preliminary injunctions concerning 623 musical works for which it claimed exclusive network-dissemination rights.

The Wuhan Intermediate People’s Court accepted evidence supporting Tencent’s rights and prohibited the relevant dissemination by NetEase and other respondents.

Although primarily a copyright rather than an AML decision, the case is important to competition analysis because it demonstrates the practical power associated with large packages of exclusive streaming rights. Enforcement of hundreds of songs simultaneously can significantly affect a competing platform’s available catalogue.

4. NetEase–Tencent Music Copyright Disputes

The competition between Tencent and NetEase produced several disputes concerning exclusive music catalogues. Historical accounts record that NetEase challenged Tencent in relation to songs over which NetEase claimed exclusive rights, while Tencent separately pursued NetEase concerning large numbers of songs.

These disputes illustrate the competitive importance of catalogue exclusivity: control of popular songs could be used to differentiate platforms and influence subscriber switching. Eventually, regulatory intervention encouraged broader sublicensing.

5. Tencent–NetEase 99% Music Copyright Sharing Arrangement, 2018

Following intervention by China’s National Copyright Administration, Tencent and NetEase agreed to make approximately 99% of the music covered by their respective exclusive licences available to each other through sublicensing arrangements.

This was not a conventional court judgment, but it is an important regulatory development for understanding Chinese music competition policy. It represented a move away from large completely closed exclusive catalogues toward wider availability of licensed content.

From a competition perspective, sublicensing can reduce foreclosure while preserving copyright owners’ ability to negotiate commercial licences.

6. Tencent–Alibaba Music Copyright Sharing Arrangement

Tencent and Alibaba also reached a music-sharing arrangement involving works that previously had been licensed exclusively to their respective services.

The arrangement formed part of the broader regulatory movement toward reducing barriers created by exclusive music catalogues.

Its significance lies in demonstrating that competition concerns do not necessarily require eliminating legitimate copyright licensing. Wider cross-platform licensing can provide an alternative mechanism for reducing exclusionary effects.

7. Gordon v. Tencent Music Entertainment Group

This United States securities litigation was not a Chinese competition-law judgment, but its factual background provides additional documentation concerning the Chinese music-licensing controversy.

The litigation discussed allegations relating to Tencent Music’s exclusive licensing practices, regulatory intervention and disputes concerning sublicensing to NetEase. The proceedings referred to the Chinese National Copyright Administration’s intervention concerning exclusive music copyright arrangements.

It should therefore be treated as contextual authority rather than a Chinese AML precedent establishing liability for rights bundling.

Assessment of Rights Bundling Under Chinese Competition Law

A rights bundle is unlikely to violate competition law merely because numerous songs are licensed together. Large catalogue licences can reduce transaction costs, simplify royalty administration and provide consumers with extensive libraries.

The competition assessment changes where the licensee possesses substantial market power.

Authorities would likely consider whether the bundled catalogue contains commercially indispensable music; competitors have realistic alternative sources; exclusivity prevents sublicensing; licences cover unusually long periods; rights holders are pressured to provide preferential terms; and the arrangement materially increases entry or expansion barriers.

The distinction between ordinary catalogue licensing and exclusionary bundling therefore depends heavily on market power, contractual restrictions, commercial justification and competitive effects.

The Tencent/CMC decision is especially important because SAMR did not simply focus on Tencent’s overall size. It examined control over exclusive copyrighted music as a strategic resource and considered whether that control could influence upstream licensing negotiations and downstream platform competition.

Remedies

Chinese authorities have several possible remedies.

They may require termination or modification of exclusive licences, prohibit unreasonable preferential terms, prevent tying or bundling, impose merger conditions, require periodic compliance reporting, or take other measures designed to restore effective competition.

The 2021 Tencent remedy is particularly significant because SAMR required structural changes to licensing behaviour rather than relying solely on a monetary penalty. Tencent was required to report compliance annually for three years.

The 2026 Tencent/Ximalaya decision confirms the continuing importance of behavioural remedies. Conditions addressed exclusive content licensing, free content, service quality, bundling involving automobile manufacturers and restrictions on creators distributing works across multiple platforms.

Conclusion

Competition law in Chinese music-streaming rights bundling involves balancing two legitimate interests: protection and commercial exploitation of copyright on one side, and preservation of effective platform competition on the other.

Bundled music licensing is not inherently anti-competitive. Problems become more serious when a platform with substantial market power accumulates extensive exclusive catalogues, prevents effective sublicensing, demands preferential terms, uses large advance payments to increase entry barriers, or connects essential content with additional products or services in ways that foreclose competitors.

The Tencent/China Music Corporation (2021) decision provides the central Chinese competition-law authority because SAMR directly connected control of exclusive music catalogues with barriers to competition. The Tencent/Ximalaya (2026) conditional approval further shows that Chinese regulators continue to scrutinize exclusive copyright arrangements and service bundling.