According to Reuters, China is preparing to impose a sizable fine on Chinese tech giant Tencent Holdings Ltd (700:Hong Kong, TCEHY: OTC US), expected at $1.54 billion.

In the nearly year, the Chinese government has increased its crackdown on Internet giants, which used to be loosely regulated.

In early April, Jack Ma's Alibaba was fined a record $2.75 billion (10.8 billion yuan) by the market regulator for anticompetitive practices such as "two-choose-for-one".

Some time ago, Chinese food delivery and e-commerce giant Meituan (3690.HK) was investigated by China's market regulator, the State Administration for Market Regulation (SAMR) for allegedly committing the same "two-choose-one" antitrust practices as Alibaba.

According to Reuters, the government fined Tencent for not properly disclosing its past acquisitions and investments for antitrust scrutiny, as well as for its monopoly on music rights.

Chinese regulators will focus their review on Tencent's music business operated in Tencent Music Entertainment Group ( NYSE: TME ), and may require the company to give up a large number of music rights, said the source.

Tencent Music was split from Tencent Holdings in late 2018 and was successfully listed in the U.S., with global music streaming service platform Spotify as well as well-known record labels Warner Music Group Corp and Sony Music Group as its shareholders.

The music group acquired its rivals Kuwo and Kugou music apps in 2016. With this investigation, Chinese regulators may ask Tencent to sell the two acquired music companies.

In addition, Tencent's core businesses, video games and WeChat, will be unaffected and remain intact.