China’s regulatory authorities have been particularly busy in the last few weeks by:
- imposing fines on six infant formula manufacturers for engaging in resale price maintenance (blogged about here and here);
- imposing fines on five jewellers and the Shanghai Gold and Jewellery Trade Association (SG&J Trade Association) for price-fixing;
- setting their sights on Tetra Pak for abuse of market dominance behaviour; and
- keeping a close eye on the car industry for potential resale price maintenance conduct.
Only two weeks after commencing investigations, the National Development & Reform Commission (NDRC) fined five jewellers and the SG&J Trade Association for alleged price fixing. The parties allegedly colluded by using a pricing guideline issued by the SG&J Trade Association to fix the price of their gold and platinum accessories. The SG&J Trade Association received the maximum penalty of RMB 500,000 (AUD 89,000) under China’s Anti-Monopoly Law for being the ringleader of the cartel, while each of the five jewellers (13 were originally investigated) were only fined 1% of their turnover for the preceding year, comprising a total of RMB 10.1 million (AUD 1.8 million). The fines were low when compared to those issued in the infant formula cartel, where fines totalled RMB 668 million (AUD 120 million). It is understood that the reason for the low fines was because the jewellery companies agreed to fully cooperate during the investigation, including admitting to their behaviour and immediately ceasing it.
Last month, China’s State Administration for Industry and Commerce announced an investigation into Tetra Pak for alleged abuse of market dominance in relation to the sale of its liquid food packaging equipment and technological services. It is alleged that Tetra Pak discriminated against its customers by favouring top-tier dairy companies as well as continuing to use tie-up provisions in its agreements even though it reportedly removed such provisions after the Anti-Monopoly Law came into force in 2008.
What to watch…
It is understood that research is being conducted by the China Automobile Dealers Association into whether foreign car manufacturers are setting minimum retail prices for the sale of foreign cars in China. It has allegedly been noticed that there is a significant difference in the price of imported cars in China compared to their overseas’ counterparts. While the NDRC has not yet publicly spoken about an official investigation, the results of the research may be worth watching!