Chinese regulators have been stepping up a crackdown in recent years on price-fixing, especially in the medical sector, where foreign companies usually have dominant positions because of their larger market shares.
It is not a secret that in China, three large foreign conglomerates - General Electric, Siemens and Philips - are leading in some technologies, so their medical devices are much more expensive than products made by Chinese companies, a former employee at a medical device maker for about two years told the Global Times on Thursday.
"Foreign firms are in more favorable positions when it comes to pricing," he noted.
The comment came after the country's top planner fined US medical device maker Medtronic about 119 million yuan ($17.3 million) for price-fixing, according to a post on the website of the National Development and Reform Commission (NDRC) on Wednesday.
Since 2014, the company has been negotiating with its deal partners and it has limited sales areas as well as competition areas, practices that violated the antitrust regulations in China, the post showed. The NDRC said it had ordered the company halt operations and end its pricing policies.
Meanwhile, the regulator has said companies may sell devices directly to end-users without going through distribution channels.
China has been pursuing more and more antitrust cases in recent years, and regulators are expected to enhance their crackdown on illegal activities, Hao Junbo, a lawyer at Beijing-based Hao Law Firm, told the Global Times on Thursday.
"For example, in the U.S., companies that violate the antitrust law will be fined much more, sometimes more than $1 billion," he said, noting that loose regulations in China in this area created loopholes for some foreign companies to take advantage of the law.
This isn't the first time that a foreign medical device maker has been fined in China. Johnson & Johnson, Bausch & Lomb Inc and several other eyeglass and contact lens producers had to pay more than 19 million yuan in fines for alleged antitrust behavior, New York-based legal information site law360.com reported in May 2014, citing an NDRC statement.
And a year earlier, Johnson & Johnson Medical China Ltd violated the country's antitrust law by setting minimum resale prices for one of its medical product distributors. The company had to pay 530,000 yuan in damages, according to the site.
"The regulators will surely become more experienced in dealing with similar cases, and companies that may violate the law in the future are likely to be fined more," Hao noted.
