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NetEase Cloud Music and Tencent Battle Over Alleged Unfair Practices

Streaming giants struggle for competitive edge under China’s new rules

NetEase Cloud Music, the music streaming service from NetEase, Inc., released a statement accusing Tencent Music Entertainment of “repeatedly and illegally allowing unauthorized” songs to be played on its platform. A complaint was also filed over copying visual elements of their app’s appearance as well. The concerns revolve around copyright infringement and plagiarism of key product features, according to NetEase’s complaints.

NetEase Cloud Music
NetEase Cloud Music

Pandaily reported that TME companies created measures to avoid NetEase Cloud Music’s copyright protection. The applications QQ music, Kugou Music, and Kuwo Music have also been accused of plagiarizing NetEase Cloud Music’s turntable vinyl record design.

TME and NetEase Cloud Music have been embroiled in copyright disputes for almost a decade. TME was compelled to surrender its exclusive licenses after the government enacted new laws against monopolies in the digital streaming space . Further, they were no longer permitted to sub-license rights in the platforms most recent pacts with Universal and Warner Music Group, allowing NetEase Cloud Music to cut separate agreements. NetEase Cloud Music was able to put agreements in place with local companies like Hong Kong’s Emperor Entertainment and Modern Sky.  Then In 2020, NetEase sealed licensing deals with Warner Chappell Music, UMG, and Sony Music globally. Regulatory authorities breaking up exclusive rights deals has helped level the playing field for the streaming giants, yet there are still disputes over copyrights and song licensing. All the while short video apps like Douyin and Kuaishou benefit from these deals.

NetEase claims “features of TME’s suite of music streaming apps allowed its users to sidestep copyright protection and play songs licensed by NetEase Cloud Music”.

Furthermore, “We urge TME to immediately rectify its products and businesses and stop all behaviors of unfair competition,” NetEase Cloud Music said in a statement on its account on the Weibo social media platform. NetEase also called for its rival to “immediately stop infringing acts, including but not limited to removing infringing works, stopping impersonation and washing songs, and rectifying related infringing functions”.

Chen Mo, head of branding and public relations at TME, issued a post on his personal WeChat account: “Let’s continue to focus on contributing to the development of the music industry. Ignoring the facts and quarreling are useless. TME is a group that respects and loves music. We at TME will not engage in the war of words … Related evidence has been preserved, and we have been filing for relevant legal proceedings.”

And the story continues…stay tuned.

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