(Bloomberg) -- Tencent Music Entertainment Group fell the most in five months as China’s antitrust authority investigates exclusive licensing deals it forged with the world’s biggest record labels.

The State Administration of Market Regulation, which launched the probe in January, is scrutinizing the Shenzhen-based company’s dealings with music labels including Universal Music Group, Sony Music Entertainment and Warner Music Group Corp., Bloomberg reported Tuesday. Shares of Tencent Music slid 6.8% in New York, marking their steepest drop since March 20. The rout pushed the stock into negative territory for the year, down 4.9%.

The three largest record labels have all sold exclusive rights to a major chunk of their music catalogs to Tencent Music, which is controlled by social media titan Tencent Holdings Ltd. but also backed by Sony and Warner. Tencent Music then sublicenses that content to smaller rivals, an arrangement they complain is unfair. Tencent Music pays fees that are unreasonably high and passes along much of those costs to its competitors, people familiar with the matter said. Licensing songs from Tencent Music for use in China can be twice as expensive compared to when licensing directly from major labels for the rest of the world, said one of the people, who asked not to be identified because the arrangement is private.

Music and video platforms, including those operated by Alibaba Group Holding Ltd., Baidu Inc. and ByteDance Inc., all have to sublicense content from Tencent Music. The regulator’s actions pose a threat to Tencent, which leveraged a billion-plus social media users to dominate a Chinese online music industry expected to be worth $30 billion by 2023. Music is now a key driver for the WeChat-operator, which is struggling to sustain growth as U.S.-China trade tensions depress its home economy.

Tencent Music, NetEase, ByteDance, Baidu and Alibaba declined to comment on the probe, which was previously reported by Capitol Forum and MLex without giving details of the pricing concerns of other platforms. The three biggest labels also declined to comment. The regulator didn’t respond to a fax seeking comment.

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Tencent Music, which floated in the U.S. last year, boasts the country’s largest music content offering, with more than 20 million tracks from over 200 domestic and international labels, according to the company’s prospectus. For the June quarter, it had over 650 million monthly active users and 31 million paying subscribers across its QQ Music, Kugou and Kuwo apps. Revenue from online music services rose 20% to 1.56 billion yuan ($218 million) in the period. But its gross margin declined to 33% from 40% in the June quarter in part because of waning sublicensing revenue from competing platforms, Chief Financial Officer Shirley Hu said on a conference call in August.