Chinese Regulators Fine Mercedes-Benz Over Price Fixing

HONG KONG — Chinese antitrust regulators on Thursday fined Mercedes-Benz about $57 million, accusing the company of fixing prices on luxury cars and some spare parts. The penalty is just the latest for a foreign carmaker in China, the world’s largest auto market.

Last summer, the country took action against several foreign companies for violations of its antimonopoly laws, moves that prompted 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, in February.

“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 a statement. “We have taken all appropriate steps to ensure to fully comply with the law.”

In announcing the 350 million renminbi fine on Mercedes-Benz on Thursday, regulators said that from January 2013 to July 2014, the carmaker, owned by the German luxury auto company Daimler, issued verbal 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 had “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 in 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.”

Chinese leaders have said foreign companies are not being selectively aimed at in the antitrust enforcement campaign.

“The Chinese government conducts antimonopoly in accordance with the law and in a transparent and consistent way,” Premier Li Keqiang told foreign business leaders in September. “China will continue to open its gate and continue to expand it.” He added: “We will continue to improve and perfect the business environment.”

The fines against Mercedes-Benz were the latest in a series of actions taking aim at automakers and parts suppliers, most of which have focused on so-called resale price maintenance. That practice involves manufacturers’ issuing minimum pricing guidelines to resellers of their products in an effort to avoid competitive cost reductions. China’s enforcers consider this a violation of its antimonopoly law and see it as harmful to consumers.

In September, regulators fined Chrysler and the Audi unit of Volkswagen a combined $46 million for antitrust violations. The previous month, China had issued fines of around $200 million in total against more than 10 Japanese auto parts and components suppliers in the country.

http://www.nytimes.com/2015/04/24/business/international/chinese-regulators-fine-mercedes-benz-over-price-fixing.html