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China investigates more than 1000 local, foreign firms for anti-monopoly practices

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Investigation authorities are broadening their antitrust investigation by contacting several foreign automakers such as General Motors, Daimler's Mercedes-Benz, and Japanese automakers. When a company is found out to have broken the country's national antitrust rules, the Chinese government immediately imposes a punishment. Such is the case with Audi and Chrysler accused of violating anti-monopoly regulations.

The investigations have been triggered by complaints on consumer prices of foreign vehicles and auto parts. The government responded by launching the investigations in a move to reduce prices from foreign-owned companies belonging in the auto, technology, pharmaceutical, and dairy sectors. It is also aimed at protecting consumers and maintaining market order.

A number of foreign car companies responded to the inquiries by announcing that they are cutting their prices. These would include BMW, Daimler's Mercedes-Benz, Volkswagen's Audi, Fiat's Chrysler, Tata Motors' Jaguar Land Rover, Honda, and Toyota which have announced that they are cutting prices of their vehicles or spare parts by July and early August.

The recent antitrust cases involving high profile companies have created rising concerns on the government's monopoly efforts. Some foreign businesses began to complain that the investigations are done unfairly and that most are targeted at them.

On Saturday, China's Ministry of Commerce released an official statement which emphasized that the six-year-old Anti-Monopoly Law does not, in any way, discriminate whether a company is foreign or domestic. "Investigations in many industries started with domestic companies and then spread to foreign companies," said by an NDRC official.

The NDRC is China's foremost economic planning agency. It is one of the government bodies that investigates Anti-Monopoly Law violations. 

Another enforcer of the anti-monopoly law is China's State Administration for Industry and Commerce. It is investigating Microsoft, a U.S. software company, for alleged monopoly practices.

Despite all these investigations, foreign companies will continue to receive equal treatment like the local companies and are encouraged to develop several forms of cooperation. The statement was said by Shen Danyang, a spokesman from the Ministry of Commerce. However, foreign companies must strictly observe Chinese laws and exercise their social responsibilities particularly when it involves food safety.

While GM and other foreign automakers responded by cutting their prices, some global companies decided to cease their operations. These would include the cosmetics maker Revlon and the Japanese dairy company Meiji Holdings Inc.

"In the past China tended to give a little favor to foreign companies," said Bo Zhiyue, author and senior research fellow at the National University of Singapore's East Asia Institute. "Foreign companies have to unlearn what they have learned and they have to relearn how to make it work in China."

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