Alibaba and Ant Group have received most of the public attention amid Beijing’s tech crackdown. The suffering of Chinese social media giant Tencent and its affiliates has gone less noticed. Yet the fate of Spotify’s Chinese rival Tencent Music Entertainment is the one that could set a worrying precedent across industries.

As a result of antitrust probes, regulators have imposed restrictions on 13 tech companies that have financial divisions, including Tencent and ByteDance. Should fines be in line with those imposed on Alibaba — about 4 per cent of its domestic sales in 2019 and well below a 10 per cent penalty limit under Chinese law — those should be manageable.

What could come next may not be so easy to brush off. Reports that regulators have told Tencent Music to give up exclusive music rights and possibly sell its key Kuwo and KuGou music apps would cause irreversible damage to the business.

Tencent Music is profitable thanks to its more than 60 per cent share of the local market and 120m paying subscribers. It relies on exclusive licensing rights to 20m songs and three streaming platforms — particularly Kuwo and KuGou — for its stronghold. Without that edge, it would be difficult to differentiate its other offerings such as live streaming from smaller rivals.

US-listed shares of Tencent Music are down 44 per cent from last month’s high but still trade at a premium to global peers on an enterprise value-to-sales basis. As that gap narrows, stakeholders such as Tencent and Spotify stand to lose. They hold 51 per cent and 8.4 per cent respectively, as of the start of this month. A forced split-up of a company in the business of music streaming would also signal that no industry is safe, weighing on Chinese equities in general.

Antitrust crackdowns are not new. China’s auto and energy industries have gone through similar probes. Yet the difference is the speed at which they are progressing. Previous probes were spread over many years, giving markets time to adjust. It has taken just five months since guidelines were drafted for the tech sector. Investors will need to move as quickly to reduce exposure.

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