Universal Music Group — the recording industry behemoth that controls about a third of the global music market — says it will yank its songs from TikTok after Wednesday.

Why it matters: TikTok's viral video algorithm relies heavily on sound, and more specifically, songs it has licensed from labels like Universal for its users to record with.

The big picture: UMG, which has been in contract renewal negotiations with TikTok, says the immensely popular platform "is trying to build a music-based business, without paying fair value for the music."

• The company represents some of the world's biggest superstars, including Taylor Swift, Drake and BTS.
• The current contract expires Jan. 31.

Driving the news: In a statement Tuesday evening, UMG said TikTok "attempted to bully us into accepting a deal worth less than the previous deal" and that would pay artists "a fraction of the rate" of similar social media platforms.

• "How did it try to intimidate us? By selectively removing the music of certain of our developing artists, while keeping on the platform our audience-driving global stars," UMG said.
• UMG also raised concerns about AI, copyright infringement, and other "problematic content," including "pornographic deepfakes of artists."

The other side: TikTok responded Tuesday night accusing UMG of putting "their own greed above the interests of their artists and songwriters."

• "Despite Universal's false narrative and rhetoric, the fact is they have chosen to walk away from the powerful support of a platform with well over a billion users that serves as a free promotional and discovery vehicle for their talent," TikTok said in a statement.

Between the lines: UMG noted in its statement that TikTok only accounts for roughly 1% of its total revenue.

Go deeper: Americans flock to TikTok for news