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BMW’s Chinese dealers fined over price-fixing

A worker fixes a BMW logo on a new car at the company's plant in Regensburg, southern Germany, on March 13, 2014/AFP

BMW Logo/AF

BEIJING, August 14 – Four Chinese dealers for German auto maker BMW have been fined about 1.6 million yuan ($260,000), authorities have said, as the government steps up a high profile anti-monopoly campaign involving a number of foreign brands.

The dealers in Wuhan in the central province of Hubei have been ordered to pay the penalties for “forming a price alliance”, provincial authorities said in a statement Wednesday.

They agreed to consistently charge a fee for the pre delivery inspection of cars, which falls under “the obligations and responsibilities” of the auto maker and its dealers, according to the statement.

“This is price swindling behaviour and must be resolutely stopped immediately,” the authorities added.

The dealers were each fined between 150,000 yuan and nearly 940,000 yuan.

China has in recent months launched high profile probes into alleged violations by a host of foreign firms in a range of different sectors including pharmaceuticals, technology and baby milk, raising fears that overseas companies are being targeted.

China’s Ministry of Commerce on Saturday released a statement emphasising that the country’s six year old Anti Monopoly Law does not discriminate between foreign and domestic companies.

The European Union Chamber of Commerce in China expressed concern in a statement Wednesday that European businesses were “increasingly considering the question of whether foreign companies are being disproportionately targeted”.

Auto firms are the latest to be investigated, and last week the government pledged to sanction Audi, owned by Volkswagen, and Chrysler of the US, now part of Italy’s Fiat group, without stating what penalties they would receive.

On Monday, Audi announced it will accept punishment for breaching Chinese anti-monopoly laws.

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The Hubei authorities also said in the statement that they were working on the penalties to be meted out to manufacturers and dealers of other auto brands including Audi.

Several car companies have announced price cuts in response to the inquiries.

Beijing considers using a dominant market position to set prices as a form of monopoly. Violators’ “illegal gains” can be confiscated, and they can be fined up to 10 percent of their sales revenues from the previous year.

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