On May 12, the State Administration for Market Regulation announced its conditional approval of the acquisition of a stake in Ximalaya by Tencent Holdings Limited, subject to restrictive commitments. This case is significant for maintaining fair competition in China's online audio streaming platform and online music platform markets, preventing "inward-rolling" competition within the platform sector, and promoting innovation and healthy development in the platform economy.

Following a review, the regulator determined that the transaction could potentially have exclusionary or restrictive effects on competition within the relevant Chinese markets. To effectively mitigate the possible adverse impacts of this concentration of undertakings, after comprehensive review and scientific assessment, the authority has approved the case conditionally. It requires Tencent, Ximalaya, and the post-concentration entity to make five restrictive commitments: they must not increase service prices, reduce service levels, or impose unreasonable transaction terms for online audio streaming platform services; they must not reduce the proportion of free content and popular free content on their audio platforms; they must not enter into exclusive licensing agreements with copyright holders of online audio content and must terminate any existing exclusive agreements within a specified period; they must not bundle online audio or music streaming platforms with sales to automobile manufacturers or hinder such manufacturers from purchasing competitors' products; and they must not restrict hosts from joining multiple online audio platforms or distributing their copyrighted works across them.

After evaluation, the regulator concluded that these commitments can effectively address the competition issues arising from the concentration, safeguarding the legitimate rights and interests of consumers, copyright holders, hosts, and automobile manufacturers, while preserving fair competition. The conditional approval was granted on May 11.

The authority will strictly supervise the parties to ensure the effective fulfillment of these restrictive commitments. It aims to leverage the ex-ante preventive role of merger control to uphold fair competition in China's online audio and music streaming markets, protect the rights of market entities and consumers, guard against "inward-rolling" competition among platforms, and foster a win-win development environment for platform enterprises, their operators, and workers.