China's competition watchdog bulks up

China's competition watchdog is adding staff and other resources as it ramps up efforts to crack down on anti-competitive behavior, especially among the country's powerful companies, people with knowledge of the matter told Reuters.

Beijing's plan to bulk up the State Administration for Market Regulation comes as China revamps its competition law with proposed amendments including a sharp increase in fines and expanded criteria for judging a company's control of a market.

On Saturday, the watchdog slapped a record 18.23 billion yuan (HK$21.64 billion) fine on Alibaba (9988) after an antimonopoly probe found the e-commerce giant had abused its dominant market position for several years.

The Beijing-headquartered agency plans to expand its antitrust workforce by around 20 to 30 staff, up from about 40 now, two people with direct knowledge of the matter said.

The watchdog also plans to delegate case reviewing power to its local bureaux and source additional manpower from other government bodies and agencies to handle cases that require extensive investigation, four other people said.

Budgets allocated for antimonopoly investigations, daily operations and research projects will also be increased, said three of the people cited above and one more person with knowledge of the matter.

With growing scrutiny, executives of major internet firms are now required to make routine reports to the antitrust bureau for merger deals or of practices that could fall foul of antimonopoly rules, one of the sources said.

Reeling from the workload, the SAMR has started to expand its presence in more cities such as Hangzhou and Shenzhen on a trial basis, instead of handling the cases all in Beijing, to delegate case reviewing power to local bureaux, two of the sources said. It has also started outsourcing more research work, covering areas including economic and industry analysis, to scholars and its own consultancy committee to speed up cases in progress, one of the sources said.

For now, however, the investor focus is on who among the home-grown technology champions will be the next target of the Chinese antitrust watchdog.

"Other tech companies would be wise to assume they may be receiving the same level of scrutiny and penalty," said Fred Hu, chairman of private equity firm Primavera Group, referring to the fine imposed on Alibaba.

"The heavy fine on one of the country's dominant tech leaders also sends a strong message to the broader tech sector that the Chinese regulators, like their European counterparts, are serious about cracking down on Big Tech."