Tencent has to give up part of its exclusive music rights in China.
The Chinese regulator of market regulation has imposed this on the company,
Tencent will also be fined 500,000 yen (more than 65,500 euros).
The penalties are the result of an acquisition Tencent made in 2016.
Five years ago, the tech giant acquired China Music, after which Tencent owns more than 80 percent of the exclusive music rights of music libraries.
According to the regulator, the takeover was against the law.
Tencent would have gained an unfair advantage over competitors because it is able to make more exclusive deals with copyright holders.
In addition, Tencent had not properly informed the regulator about the acquisition.
Tencent will have 30 days to waive the rights it acquired after the acquisition.
The tech giant must also keep the Chinese regulator informed about compliance with the rules every year for the next three years.
In a response, Tencent says it will "comply with all legal requirements".
The company also says that it will contribute to healthy competition in the market.
China tougher on tech companies
Tencent is one of the largest tech companies in China.
The company owns the chat app WeChat and invests heavily in the game market.
The Chinese authorities have been tightening the supervision of companies such as Alibaba and Tencent for some time.
Beijing has decided to take tougher action against large corporations that have a lot of power.
Until recently, they were bound by few rules.