Newspaper article International New York Times

China Fines Mercedes in Antitrust Crackdown

Newspaper article International New York Times

China Fines Mercedes in Antitrust Crackdown

Article excerpt

The automaker was fined the equivalent of $57 million and accused of fixing prices on luxury cars and spare parts.

Chinese antitrust regulators fined Mercedes-Benz the equivalent of $57 million on Thursday, accusing it of fixing prices on luxury cars and parts in the latest big-ticket penalty for a foreign carmaker in the world's largest auto market.

Last summer, China took high-profile action against several foreign companies accused of violations of its antimonopoly laws, moves that prompted several business groups to question whether the laws were being selectively applied.

Since then, foreign companies in industries like automobiles, technology, pharmaceuticals and food packaging have faced increased scrutiny in China, including raids on their offices and hefty fines. That included a record $975 million fine against Qualcomm, the American chip maker, issued in February.

In announcing the fine of 350 million renminbi against Mercedes- Benz, regulators said on Thursday that from January 2013 to July 2014, the carmaker, owned by the German luxury auto company Daimler, had issued verbal or telephone pricing instructions to dealers in the eastern province of Jiangsu.

Mercedes-Benz told them to maintain minimum prices for its E- and S-Class sedans or face the risk of "reduced policy support" from the carmaker, according to the regulator, the National Development and Reform Commission.

Starting in 2010, the carmaker was found to have issued similar instructions on the minimum pricing of some replacement parts, according to a statement by the pricing bureau of the Jiangsu branch of the commission, one of three government agencies charged with enforcing China's antimonopoly laws.

Mercedes-Benz "played a dominant and promoting role" in creating and enforcing the price agreements, the pricing bureau said. The Jiangsu pricing officials announced the initial violations last August. It was unclear why the officials waited to issue the fine, which they said was equal to 7 percent of Mercedes-Benz's annual sales in what the bureau identified as the "relevant market."

"Mercedes-Benz China accepts the decision and takes its responsibilities under competition law very seriously," a spokesman for Daimler based in Beijing said Thursday in an emailed statement. …

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