China Slaps Price-fixing Fines on Audi, Chrysler

China is to fine motor manufacturer Audi 248.6m yuan (CNY) or US$40.5m and Chrysler CNY31.7m (US$5.2m), in its latest anti-monopoly crackdown on the car industry that has triggered complaints of foreign businesses being treated unfairly.

The country’s National Development and Reform Commission (NDRC) also fined eight distributors a total of CNY30m. According to the Cabinet agency that oversees anti-monopoly enforcement Audi, the luxury cars division of Germany’s Volkswagen AG, improperly enforced minimum prices that dealers were required to charge for vehicles and service.

Chrysler, part of Fiat Chrysler Automobiles NV, was fined for enforcing minimum prices for vehicles sold by dealers in Shanghai, according to the city’s price bureau. It said three dealerships were fined a total of CNY2.1m for agreeing to fix minimum prices for service, paint jobs and repairs. While setting minimum retail prices is standard practice in some countries, Chinese regulators reportedly regard it as a violation of free market principles.

Three weeks ago the NDRC announced fines totaling CNY1.235bn imposed on
12 Japanese motor parts suppliers
  for colluding to raise prices. A government statement said they were found to have colluded, some for as long as 10 years, to set minimum prices.

China’s regulators have launched investigations into the pricing and business practices of motor manufacturers, technology suppliers and other companies in an apparent effort to force down prices. Business groups complain that the secretive and abrupt way the investigations are conducted is alienating foreign companies and this week the US Chamber of Commerce suggested that Beijing might be violating its free-trade commitments.

However, regulators have responded by denying that foreign companies are treated unfairly. In a report they defended the investigations and said that foreign companies account for only 33 of 335 cases launched under China’s 2008 anti-monopoly law.

“All types of market players are treated equally in anti-monopoly enforcement,” said the report by the NDRC and the State Administration for Industry and Commerce (SAIC).

The watchdogs maintained that enforcement is open and transparent, despite complaints that companies sometimes are blocked from seeing evidence against them or from bringing lawyers to meetings with regulators and are threatened with more severe penalties if they challenge accusations.

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