International automakers penalized for price fixing

Investigations not targeting foreign companies, antitrust authorities say

Chinese regulators handed down hefty fines to two multinational automakers on Thursday for price-fixing.

FAW-Volkswagen Sales was fined 248.5 million yuan ($40.5 million) by the Hubei Bureau of Price Supervision, which is equivalent to 6 percent of the company's 2013 Audi sales in Hubei.

Seven of its Audi dealers were fined 29.9 million yuan, equivalent to 1 to 2 percent of 2013 sales in local market.

Chrysler, VW fined $46 million for unfair pricing

Ins and outs of Anti-monopoly drive

Meanwhile, Chrysler Group China Sales was fined 31.6 million yuan by the Shanghai government, equivalent to 3 percent of its previous year's sales in Shanghai. Three Chrysler dealers were fined 2.14 million yuan, according to the National Development and Reform Commission.

Neither company would comment on the decision.

Recent high-profile antitrust cases have sparked concerns among foreign business groups that foreign companies are under "selective and subjective enforcement" of antitrust law.

Xu Kunlin, director of the bureau of price supervision and anti-monopoly at the NDRC, said China's three antitrust regulators have fewer than 100 staff members.

"With such a small team, we are not capable of selective enforcement. Our investigations mainly follow public reports, so they are selected by consumers," said Xu, adding that it does not matter whether the company is foreign-owned.

However, Xu said only one-tenth of the companies involved in NDRC antitrust probes were foreign companies.

The NDRC has reviewed 335 anti-monopoly cases against companies and industrial associations, among which 33 involved foreign-invested companies, he said at a news conference.

Similarly, one-fifth of the companies involved in probes by another antitrust regulator, the State Administration of Industry and Commerce, were foreign companies.

Qualcomm probe

Xu will meet with top executives of the US chipmaker Qualcomm for the fifth time on Friday, he said.

The Qualcomm case was initially reported by two American companies in 2009 for abuse of its dominant market position, he said, and then reported by an Asian company and Chinese companies before the NDRC conducted antitrust probes.

"Investigation in the Qualcomm case has finalized and will soon enter the stage for deciding about the penalty," said Xu.

Zhang Jianping, a senior researcher at the Institute for International Economic Research at the NDRC, said foreign companies are still in an "adjustment period" to a more stringent enforcement of antitrust law as enforcement was somewhat lacking in previous years.

However, more clear and transparent procedures of antitrust investigations will help foreign companies better understand Chinese antitrust probes, he said. China has three law enforcement agencies and there are overlaps, which may confuse foreign companies, he said.

Li Fangfang contributed to this story.

AT A GLANCE

Biggest fines since the Anti-Monopoly Law was adopted in 2008

Aug 20, 2014: Ten Japanese auto parts companies were fined a total of 1.24 billion yuan ($202 million) for price fixing by the NDRC. The largest single fine, of 290 million yuan, was imposed on Sumitomo Electric Industries Ltd, which is also the largest antitrust fine imposed on one company.

Aug 7, 2013: The NDRC levied fines of nearly 670 million yuan against six milk powder companies for price fixing and anticompetitive practices. The six companies are Mead Johnson, Dumex, Abbott, Friesland, Fonterra and Biostime.

Feb 19, 2013: Domestic premium liquor makers Kweichow Moutai and Wuliangye Yibin were fined a total of 449 million yuan ($71.3 million) for resale price manipulation.