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NetEase accuses Tencent of infringing its intellectual property

By | Published on Thursday 28 April 2022

NetEase Cloud Music

The music division of Chinese web giant NetEase has accused its main rival in the country’s digital music market – Tencent Music Entertainment – of infringing its intellectual property rights, including the copyright in tracks it exclusively controls, and other IP rights relating to how its platform looks and operates.

It’s generally been more common for digital music platforms in China to have exclusive rights over certain catalogues of music, either by signing exclusivity deals with record companies or by having direct relationships with artists.

The former approach has mainly been phased out after the Chinese competition regulator ordered Tencent – which had the most exclusivity deals with labels, especially in relation to global repertoire – to bring all such arrangements to an end. However, direct relationships between platforms and independent artists continue.

In a long statement published yesterday, NetEase accused Tencent of making music that it controls available without licence, employing sneaky tactics to avoid systems designed to stop such unofficial usage. It also claimed that Tencent – which operates a number of music services like QQ Music, Kuwo Music and Kugou Music – routinely creates ‘imposter songs’ linked to the tracks it controls, so similar sounding songs with similar or identical titles.

Aside from its grievances around actual music, NetEase also listed various ways in which it believes the different Tencent music apps have ripped off its app when evolving both functionality and look and feel.

NetEase then said that its rival had long pursued anti-competitive tactics of this kind to the detriment of both its music service and the wider digital music sector, but that such tactics had intensified over the last two years, forcing it to go public with its complaints.

It called on Tencent to “immediately stop these infringing acts”, including by removing the unlicensed and imposter tracks from its services; to stop engaging in “unscrupulous unfair competition”; and to “immediately investigate violations of laws and regulations in each of its businesses, and suggest business ethics training for its employees”.

Tencent is yet to respond.