EXCLUSIVE China readies plan to elevate status of antitrust unit - sources

BEIJING, Oct 13 (Reuters) - China is considering boosting the status of its antitrust bureau within the market regulatory agency as it steps up a campaign against anti-competitive behaviour, two people familiar with the matter said.

Urged on by President Xi Jinping, the once low-profile State Administration for Market Regulation (SAMR) has made headlines this year with a push to root-out and penalise anticompetitive behaviour, particularly in the vast online "platform" economy.

Under a new structure under consideration by the government, the antitrust bureau would become the National Antimonopoly Bureau and be elevated to deputy-ministerial status, while remaining within SAMR, said two people with knowledge of the plans.

The higher ranking would help antitrust investigators gain resources when examining mergers and acquisitions, the people said, strengthening their hand as Beijing seeks to rein in the power of corporate behemoths. read more

The proposed new structure, details of which have not been reported before, would also bolster SAMR's in-house capability to conduct research that it has previously had to outsource, according to the people.

Reuters reported in April that Beijing was planning to bulk up SAMR's antitrust workforce and delegate case reviewing power to its local bureaus. read more

Gan Lin, current deputy minister of SAMR, would lead the upgraded bureau within SAMR, the people said.

SAMR did not respond to a request for comment on the plans and Gan could not immediately be reached for comment.

The plan is subject to change and needs final approval of China's State Council, or cabinet, as well as the National People's Congress, said the sources, who declined to be named as they were not authorised to speak with media.

The proposed status upgrade of SAMR's antitrust bureau comes after Xi in March cited the need to "strengthen antitrust powers" to rein in corporate giants that play a dominant role in the country's consumer sector. read more

Beijing has looked to European antitrust authorities as a model as it seeks to upgrade its antitrust capabilities, one of the people said. In August, SAMR's antitrust office said on its website that it had invited experts from the EU and United States to hold online courses for Chinese "antitrust talents".

"Compared to other major anti-monopoly enforcement authorities in the world, the authorities in China currently have fewer staff, which needs to be changed in the future," Wu Zhenguo, head of SAMR's anti-monopoly bureau, told industrial online journal The Antitrust Source in a July interview.

China has shed what was once a relatively laissez-faire approach to market regulation of the internet sector in dramatic fashion this year, including blocking mergers and imposing a record $2.75 billion fine on e-commerce giant Alibaba Group Holding (9988.HK) for abusing its market position. read more

This month, it levied a $527 million fine on food delivery giant Meituan (3690.HK), also for abusing its market dominance.

Beijing has in the past elevated the administrative status of other regulatory bodies as its governance agenda evolved. The Ministry of Ecology and Environment was upgraded from a national bureau to a ministry in 2008, and later revamped with greater powers during a 2018 governmental overhaul.

($1 = 6.4485 Chinese yuan renminbi)

Reporting by Cheng Leng, Yingzhi Yang and Tony Munroe; Editing by Stephen Coates

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