Tencent and Vivendi have been making gradual progress toward a deal to see the China-based company acquire a stake of Universal Music Group. Even before the sale is a done deal, it already has an opponent. IMPALA, the organization representing indie music companies, issued a statement against Tencent acquiring a portion of the major label.
“Even at a low level of shareholding, we believe the risk of harm for consumers and competitors from such a transaction would be a concern because of the impact in both the digital market and the music sector, with independents being squeezed further and artists also losing out,” IMPALA Executive Chair Helen Smith said.
Smith added that Tencent’s dominance over China’s music market and Tencent Music’s current investigation by the Chinese competition watchdog made the company’s interest in a major label concerning.
“We would expect regulators to also be concerned about the Spotify-Tencent link,” she added. “We believe it would be difficult for Tencent and other companies with power in a vertical market to acquire influence over the world’s biggest set of repertoire.”