Tencent Music Wins Court Battle Against NetEase Rival
Tencent Music Entertainment (NYSE: TME) has won a copyright dispute against its rival in China, a music arm operated by NetEase Inc. (Nasdaq: NTES).
A court in Shenzhen has ruled that NetEase Cloud Music and two of its affiliates will pay Tencent Music 850,000 yuan ($121,487) for violation of copyrights, which concluded a battle that lasted for more than a year, Caixin Global reported today. According to the ruling, NetEase Music infringed on TME's copyrights on 178 songs by prominent Chinese singer Jay Chou, the report said.
Separately, Tencent Music is facing class action suits in the United States. The proceedings were initiated after Bloomberg reported in August, that China was scrutinizing Tencent Music's exclusive licensing deals with major record labels, including Sony Music Entertainment, Warner Music Group Corp. and Universal Music Group.
Following the news, a number of law firms have pursued action against the music giant. One of the investor rights litigators involved, Rosen Law Firm, told CapitalWatch last month that the lead council on the case will be decided after Nov. 25.
At the time, shares in Tencent Music dropped to trading under $13 apiece, but have rebounded since, taking a leap to $14.24 per ADS earlier this month. On Wednesday, the stock in TME closed at $13.59 per American depositary share, down 1% on the day.
Operating as a subsidiary of Tencent Holdings Ltd. (HKEX: 0700), TME raised $1.1 billion in its initial public offering at the end of 2018. The music platform had 31 million online music paying users as of June, according to its public reports.
Tencent Music announced it will report its third quarter financials after markets close on Nov. 11.