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China strengthens competition watchdog while increasing repression of giants


 China strengthens competition watchdog while increasing repression of giants

China's competition watchdog adds staff and other resources as it ramps up its efforts to crack down on anti-competitive behaviors, especially among the country's power companies.

China strengthens competition watchdog while increasing repression of giants

Beijing's plan to strengthen SAMR comes as China is amending its competition law with proposed amendments, including sharp increases in fines and expanded standards to judge the company's market control.

On Saturday, the competition watchdog imposed a record fine of $ 2.75 billion against Alibaba after it found that the e-commerce giant had abused its dominant position in the market for several years.

The fine highlights the challenges ahead for companies, including global ones with operations in China, especially in the technology sector that has boomed through years of regulatory laxity and relatively little interference in the market.

It also reflects the increased activity of the US and European antitrust authorities in recent years.

The Beijing-based agency plans to expand the antitrust workforce by about 20 to 30 employees, up from about 40 now.

The competition watchdog intends to give its local offices the authority to review cases and obtain additional workforce from other government agencies and agencies to deal with cases requiring extensive investigation.

Budgets are also increased for antitrust investigations, day-to-day operations, and research projects.

The Anti-Monopoly Office of the State Administration for Market Regulation (SAMR) was established in early 2018 after two other government departments merged in it to form a single body to monitor monopolistic activities.

The office has also been provided with new, stricter laws in the past few months.

  • The strengthened SAMR powers come after the Chinese president said last month that there was a need to strengthen antitrust powers to rein in the giants that play a dominant role in the country's consumer sector.

  • A legal source close to SAMR said: The administration didn't feel it had the mandate to do so previously, but it is doing so now, with reference to the need to regulate internet companies, which were seen as slightly above the law.

And with increased scrutiny, CEOs of major internet companies are now required to submit routine reports to the antitrust office for merger deals or practices that may conflict with antitrust rules.

Because of the workload, SAMR has begun to expand its presence in more cities on a trial basis and delegate to local offices the authority to review cases rather than dealing with all cases in Beijing.

Investors' focus is now on who will be the next target of the China Antitrust Supervision Authority among domestic technology companies.

The heavy fine imposed on one of the country's dominant technology companies sends a powerful message to the broader tech sector that Chinese regulators, like their European counterparts, are serious about cracking down on the big tech companies.