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 On Wednesday, the State Administration for Industry and Commerce (SAIC)
conducted its second round of raids against Microsoft, including for
the first time its financial services provider Accenture Plc.
Another anti-trust regulator, the National Development and Reform
Commission (NDRC) also said on Wednesday it would punish Volkswagen
AG's <VOWG_p.DE> Audi unit and Chrysler, owned by Fiat SpA, after an
ongoing investigation showed they had engaged in monopoly practices.
Chinese regulators have in the past few years intensified their
enforcement of the six-year-old anti-monopoly law, which stipulates
fines of between 1 and 10 percent of a company's revenues for the
previous year for anti-competitive practices.
In addition to the SAIC and the NDRC, the Ministry of Commerce (MOFCOM)
is also tasked with enforcing the law, which is still relatively
new. In some cases, officials are required to consider industrial
policy.
Legal experts point out that the authorities appear to have wielded
the law against more foreign multinationals than local companies.
The firms targeted include Mead Johnson Nutrition Co and Danone SA,
which the regulator slapped with hefty fines, as well as U.S.
chipmaker Qualcomm Inc which faces the prospect of a $1 billion
fine.
"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." The AML is the anti-monopoly law.
In April, the U.S. Chamber of Commerce sent a private letter to
Secretary of State John Kerry and Treasury Secretary Jacob Lew
urging Washington to get tough with Beijing since enforcement of the
anti-monopoly law was being used to pursue "China's industrial
policy goals".
"It has become increasingly clear that the Chinese government has
seized on using the AML to promote Chinese producer welfare and to
advance industrial policies that nurture domestic enterprises,
rather than the internationally accepted norm of using competition
law to protect consumer welfare and competition," the letter said.
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The authorities say the law is applied to both domestic and foreign
firms, with the aim of protecting consumers. The NDRC has said it
has targeted local telecoms companies, including China Unicom and
China Telecom Corp, and local financial institutions for anti-trust
practices.
"The NDRC gives equal treatment to all market participants," Xu
Kunlin, director general of NDRC's price supervision and
anti-monopoly bureau, told Reuters recently.
"Those who have been penalized include state-owned enterprises,
private companies, and foreign-owned enterprises, and industry
associations," he said, adding that the law was "to protect market
order and fair competition".
The NDRC's investigation into the auto industry followed domestic
media complaints that foreign carmakers were overcharging Chinese
customers for vehicles and spare parts. The probes spurred Audi and
Mercedes-Benz, which is owned by Daimler AG, to lower their spare
part prices in China.
"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 (Shanghai) Co. Ltd.
(Editing by Miral Fahmy)
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