China: the anti-trust fight is in full swing image

Recent probes in the world’s largest auto market and the second global economy have resuscitated older worries – is the still Communist government protecting its local enterprises against the advances made by foreign companies?

This week, the State Administration for Industry and Commerce (SAIC) targeted for the second time Microsoft Corp, with raids including at its financial services provider Accenture Plc. Another anti-monopoly law regulator – the National Development and Reform Commission (NDRC) – said on the same day it decided to take punitive action against Volkswagen AG’s Audi division and America’s Chrysler – after an investigation gathered evidence of monopoly practices.

“A significant proportion of the high profile cases appear to involve big foreign firms,” said Mark Williams, an anti-trust expert and professor at University of Melbourne Law School. “Critical observers have suggested that this gives the appearance that the AML is being used to discipline new entrants to the China market.”

“Monopolistic practices are quite rampant in the auto industry. NDRC is first targeting imported luxury brands because the problem is most severe in this area,” said Yale Zhang, managing director of consultancy Automotive Foresight.

Local media reports that targeted the foreign brands led to NDRC’s investigation – as the foreign brands were believed to severely overcharge Chinese customers for cars and spare parts. Audi, Mercedes-Benz and Jaguar were among the companies to lower their prices for vehicles and products.

Via Reuters