GM’s main China venture fined $29 mln in anti-monopoly case

Regulators appear to regard setting minimum retail prices as a restraint on competition

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General Motors Co.’s main joint venture in China was fined $29 million on Friday on charges it suppressed competition by enforcing minimum sales prices for dealers, the latest in a string of penalties against foreign auto brands under the country’s anti-monopoly law.

Chinese regulators have punished companies in industries from milk to medical devices under a 2008 anti-monopoly law in what appears to be an effort to force down consumer prices.


Public criticism

Friday’s announcement followed public criticism by US President-elect Donald Trump of Chinese trade practices but there was no indication the case was linked to that. GM had announced in August 2014 its joint venture, Shanghai GM, was under investigation by anti-monopoly regulators.

The Shanghai Price Bureau said Shanghai GM, a joint venture with state-owned Shanghai Automotive Industries Corp., improperly suppressed competition by enforcing minimum prices dealers were allowed to charge for Cadillac, Chevrolet and Buick models.

That “disrupted the normal order of market competition,” the statement said.

Setting minimum retail prices is a common practice in many markets but lawyers say Chinese regulators appear to regard it as an improper restraint on competition.

A statement by the price bureau said the penalty was set at 4 percent of Shanghai GM’s annual sales, or 201 million yuan ($29 million).

In a statement, GM said: “GM fully respects local laws and regulations wherever we operate. We will provide full support to our joint venture in China to ensure that all responsive and appropriate actions are taken with respect to this matter.”

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