China fines Audi, Chrysler on monopoly charges

Audi models on display in Beijing.
Audi models on display in Beijing. AP

China on Thursday announced it will fine Audi $40.5 million and Chrysler $5.2 million in a sweeping anti-monopoly investigation of the auto industry that has prompted complaints foreign businesses are being treated unfairly.

Regulators have launched inquiries into global automakers, technology suppliers and other companies in an apparent effort to force down prices. Business groups say the secretive and abrupt way the investigations are conducted is alienating foreign companies, and the U.S. Chamber of Commerce said this week Beijing might be violating its free-trade commitments. Regulators deny foreign companies are treated unfairly.

Audi, the luxury unit of Germany’s Volkswagen AG, improperly enforced minimum prices that dealers were required to charge for vehicles and service, according to the Cabinet agency that oversees anti-monopoly enforcement, the National Development and Reform Commission. It said Audi was fined $40.5 million and eight distributors a total of $4.9 million.

Chrysler, part of Fiat Chrysler Automobiles NV, was fined $5.2 million for enforcing minimum prices for vehicles sold by dealers in Shanghai, according to the city’s price bureau. It said three dealerships were fined a total of $343,000 for agreeing to fix minimum prices for service, paint jobs and repairs.

Setting minimum retail prices is common in some countries, but lawyers say Chinese regulators see it as a violation of free market principles.

In a report Thursday, regulators defended the investigations, saying foreign companies account for only 33 of 335 cases launched under China’s 2008 anti-monopoly law. It said enforcement is open and transparent, despite complaints that companies sometimes are blocked from seeing evidence against them or from bringing lawyers to meetings with regulators and are threatened with more severe penalties if they challenge accusations.