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China’s Largest Anti-monopoly Ticket -- 12 Japanese Enterprises were Fined 123.5 Million Yuan

The National Development and Reform Commission of the P.R.C. (NDRC) disclosed on August 20 that it imposed a fine of 831.96 million yuan for price monopoly on eight Japanese auto parts companies, including Sumitomo, and a fine of 403.44 million yuan on four Japanese bearing companies, including Seiko. The fine totaled 1235.4 million yuan. This was the largest ticket issued since the Chinese anti-monopoly investigation.

NDRC indicated that it was verified that in order to reduce competition and get auto parts orders from automobile manufacturers with the most advantageous price, eight Japanese auto parts companies, namely Hitachi, Denso, Aisan, Mitsubishi Electric, Mitsuba, Yazaki, Furukawa and Sumitomo, conducted frequently bilateral and multi-lateral meetings in Japan from January 2000 to February 2010, negotiated price with one another and reached and implemented agreements on order quotation for a number of times. The orders obtained through price negotiation involved 13 products, including starters and alternators, etc. in Chinese market. And these parts were used in more than 20 vehicle models from Honda, Toyota, Nissan, Suzuki and Ford.

Four bearing companies, namely Nachi, Seiko, JLETK and NTN, organized Asian seminars in Japan and export market meetings in Shanghai from 2000 to June 2011, discussing about the policy, timing and scope of price increasing in Asian and Chinese markets, and increased price accordingly.

NDRC pointed out that the abovementioned 12 companies were suspected of concluding and implementing price monopoly agreements on auto parts and bearings, which violated stipulations of Anti-monopoly Law of the P.R.C., excluded and restricted market competition, affected wrongfully the price of auto parts, whole vehicles and bearings in China, and injured the legitimate rights and interests of downstream manufacturers and the interests of Chinese consumers.

For the case of auto parts price monopoly, NDRC decided to exempt Hitachi, the first company initiatively reported about the monopoly agreements and provided important evidences, from punishment; imposed a fine of 150.56 million yuan, 4% of the revenue of the previous year, on Denso, the second company initiatively reported about the relevant situation of the monopoly agreements; imposed a fine of 6% of their revenue of the previous year, equal to 241.08million yuan, 34.56 million yuan and 29.04 million yuan respectively, on Yazaki, Furukawa and Sumitomo which negotiated on the price for only one product; and imposed a fine of 8% of their revenue of the previous year, equal to 29.76 million yuan, 44.88 million yuan and 40.72 million yuan respectively, on Aisan, Mitsubishi Electric and Mitsuba which negotiated on the price of more than two products.

For the case of bearing price monopoly, NDRC decided to exempt Nachi, the first company initiatively reported about the monopoly agreements and provided evidences, from punishment; imposed a fine of 174.92 million yuan, 4% of the revenue of the previous year, on Seiko, the second company initiatively reported about the relevant situation and submitted all the evidences and sales data relating to Chinese market; imposed a standard fine of “6%”, amounting to 119.16 million yuan, on NTN which quitted the Asian seminars in September 2006 yet still attended the Chinese export market meetings; and imposed a fine of 109.36 million yuan, 8% of the revenue of the previous year, on JLETK which proposed to convene export meetings specifically for Chinese market.

NDRC required the companies involved in the two cases to immediately make rectification and reformation of their marketing policies and behaviors according to Chinese law, conduct anti-monopoly trainings to all their employees, take practical actions to eliminate consequences of their unlawful acts in the past, actively safeguard the competition order and benefit consumers.

NDRC indicated that it would continue to investigate deeply on other clues of illegal behaviors it found during this investigation.
  
Time: August 20, 2014                              Source: China

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