Antitrust probes will take place much more frequently in the future: expert
German premium car maker Mercedes-Benz was fined 350 million yuan ($56.49 million) for price fixing, a local regulator announced Thursday, the highest antitrust fine slapped on automakers by China so far.
From January 2013 to July 2014, Mercedes-Benz reached agreements with local dealers to enforce minimum prices for the company's E Class and S Class sedans as well as some auto parts, the price bureau of East China's Jiangsu Province said in a statement on its website.
Mercedes-Benz played a "leading role" in the pricing monopoly and it gave warnings or reduced support to dealers if they refused to cooperate in enforcing the minimum prices, according to the statement.
Mercedes-Benz dealers in Nanjing, Wuxi, and Suzhou, three cities in Jiangsu, were also fined 7.87 million yuan for price fixing, the provincial price bureau said.
"Mercedes-Benz fully respects and accepts the findings and punishment decision, and will comply immediately. At the same time, we have developed… a series of targeted reform measures guided by the law enforcement authorities," Mercedes-Benz said in a statement e-mailed to the Global Times on Thursday.
The investigation into Mercedes-Benz is part of a wide-range antitrust probe of the auto industry and some major automakers have already been fined due to price fixing.
In August 2014, four BMW dealers in Central China's Hubei Province were fined 1.62 million yuan by the local authorities for pricing monopoly. In September, FAW-Volkswagen, which produces the premium brand Audi in China, and eight dealers in Hubei, were fined 279 million yuan by the Hubei pricing bureau for price fixing involving Audi sales.
US automaker Chrysler and some of its dealers were also fined by the Shanghai price authorities in September 2014 for similar wrongdoings.
China's antitrust law, which took effect in August 2008, is playing a bigger role in regulating firms' behavior, experts said.
"Such antitrust probes will take place much more frequently in the future, especially in the auto sector," Wei Shilin, a senior partner at Dacheng Law Offices in Beijing, told the Global Times Thursday.
He noted that such antitrust probes will also serve as a warning to the entire auto industry and bring about positive changes.
Media reports said that an unidentified Japanese automaker is also under antitrust investigation in South China's Guangdong Province.
Automakers in China enjoy a strong position in their relationship with dealers. Under a regulation that took effect in 2005, dealers can only sell cars and auto parts authorized by automakers, which has put automakers in charge of setting prices or sales targets.
But China's Ministry of Commerce is mulling a revision of the 2005 regulation, media reports said. Auto dealers might be allowed to sell cars from different auto brands under the revised regulation, a move that will reduce the power of automakers. Analysts said that the move will encourage competition and reduce monopolistic behavior by auto companies.
The antitrust probes have not been restricted to the auto sector. In February, US chipmaker Qualcomm Inc was slapped a record fine of 6.09 billion yuan for price fixing by the National Development and Reform Commission (NDRC), one of China's antitrust authorities.
There have been concerns that China's antitrust probes are targeting foreign firms, but the concerns have been frequently dismissed by Chinese authorities and experts.
Domestic and foreign firms are equal under the antitrust law, said Wang Xiaoye, an antitrust expert and a professor at the Chinese Academy of Social Sciences.
Also, Wang noted that foreign firms are not likely to quit China because of the probes, as the country remains a very important market for them.
NDRC officials have also said that China's antitrust probes are not intentionally targeting foreign firms, media reports said.
"Fairness and transparency should be guaranteed in antitrust probes in order to convince the companies involved," said Tu Xinquan, an export of the China Institute for WTO Studies at the University of International Business and Economics in Beijing.
