China car probes mark anti-monopoly war

BEIJING - China on Wednesday announced that it will punish two auto giants for monopolistic practices, indicating a step up in enforcement of the country's six-year-old Anti-Monopoly Law.

Separate anti-trust probes into Chrysler and Audi, conducted since late 2011 alongside similar investigations into other players in the auto sector, are drawing to an end, said Li Pumin, spokesman for the National Development and Reform Commission (NDRC).

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He did not specify punishments.

Chrysler was investigated by the Shanghai Municipal Development and Reform Commission and Audi by the Hubei Province Price Bureau.

Probes into 12 Japanese companies have also been completed, finding monopolistic behavior on prices of auto parts, and they will be punished in accordance with the law, Li said.

He confirmed reports that the Jiangsu Province Price Bureau separately launched an anti-trust investigation last week into Mercedes-Benz dealers in five Jiangsu cities. On Monday, inspectors from the bureau and the Shanghai Municipal Development and Reform Commission visited Mercedes-Benz's Shanghai premises.

Inspectors are still collecting evidence and investigating whether the German car giant has used monopolistic tactics, the spokesman said.

The NDRC launched anti-monopoly probes into the auto sector at the end of 2011 to safeguard competition in the market and protect customer rights.

If a firm manipulates prices by controlling production, distribution and sales of a product, it violates the Anti-Monopoly Law, which came into force in 2008.

According to the Anti-Monopoly Law of China, enterprises which have been involved in a monopoly may be fined between 1 and 10 percent of their total sales of the previous year.

Many auto makers, especially luxury brands, have announced price cuts in the past two weeks.