China fines Audi, Chrysler on monopoly charges

China today announced it will fine automaker Audi USD 40.5 million and Chrysler USD 5.2 million in a sweeping anti-monopoly probe of their industry that has prompted complaints foreign businesses are being treated unfairly.
Regulators have launched probes of global automakers, technology suppliers and other companies in an apparent effort to force down prices.
Business groups say the secretive and abrupt way the investigations are conducted is alienating foreign companies, and the U.S. Chamber of Commerce said this week Beijing might be violating its free-trade commitments. Regulators deny foreign companies are treated unfairly.
Audi, the luxury unit of Germany's Volkswagen AG, improperly enforced minimum prices that dealers were required to charge for vehicles and service, according to the Cabinet agency that oversees anti-monopoly enforcement, the National Development and Reform Commission. It said Audi was fined USD 40.5 million and eight distributors a total of USD 4.9 million.

Chrysler, part of Fiat Chrysler Automobiles NV, was fined USD 5.2 million 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 USD 343,000 for agreeing to fix minimum prices for service, paint jobs and repairs.
Setting minimum retail prices is common in some countries but lawyers say Chinese regulators see it as a violation of free market principles.

In a report today, regulators defended the investigations, saying foreign companies account for only 33 of 335 cases launched under China's 2008 anti-monopoly law. It said enforcement is open and transparent, despite complaints that companies sometimes are blocked from seeing evidence against them or bringing lawyers to meetings with regulators and are threatened with more severe penalties if they challenge accusations.

"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.
Industry analysts say the auto investigation might have been prompted by complaints automakers abuse their control over supplies of replacement components to charge excessive prices.
The NDRC announced Aug 20 it would fine 12 Japanese auto parts suppliers a total of USD 202 million 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.