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Music Streaming War Intensifies: NetEase Unit Sues Tencent Music Over Unfair Competition

若离

若离

· 4月28日

NetEase Cloud Music claimed QQ Music, KuGou and other platforms under Tencent Music have offered pirated music massively and intentionally since 2020.

BEIJING, April 27 (TMTPOST)— The war in music streaming service in China is intensifying as two major players owned by internet giants will battle in the courts.

Source: Visual China

NetEase Cloud Music announced on Wednesday that it has officially filed lawsuit against Tencent Music Entertainment (TME). The music streaming service unit of NetEase alleged TME had various acts of unfair competition, which can be classified into two types: copyright infringement and design plagiarism. TME was accused of allowing its music apps to play “unauthorized” songs by features that circumvent copyright controls, and even worse, QQ Music, KuGou and other platforms under TME have offered pirated music massively and intentionally since 2020. At least more than 5000 songs on TME platforms which have similar verses or choruses with original songs, NetEase Cloud Music estimated. The company also claimed TME copied features and graphical user interface (GUI) of its products.

TME will not join in any fight in words, which just overlooked facts and be no use for the industry, Chen Mo, head of TME brand public relations, responded later that day. Chen said his company has had appealed relevant legal cases previously and reserved evidence accordingly.    

The new lawsuit suggests the friction between TME and its Chinese rivals is escalating. Last August, TME terminated all exclusive copyright agreements after the State Administration for Market Regulation, China’s top market regulator, ordered Tencent to give up its exclusive music licensing rights and levied a  fine of RMB500,000 (US$77,141) for violations in its acquisition of China Music in 2016. TME saw significant sales decline following dissolvement of copyright moat. Its revenue and net income fell 8.7% and 55.3% year-over-year in the last quarter of last year respectively. The copyright pool of NetEase Cloud Music increased to 80 million songs, up from 60 million songs a year earlier, financial results showed.

However, TME still dominates the market. As of December 2021, KuGou, QQ, and Kuwo – three music apps under TME were the three most popular music streaming apps in China, and their leader KuGou had around 308.8 million monthly active users, according to market data platform Statista.

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