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Chinese Antitrust Enforcers Under Fire for Targeting Foreign Firms

China’s antitrust regulators have been on a tear lately.  Last year the State Administration for Industry and Commerce (“SAIC”) began its investigation of Qualcomm for allegedly violating China’s 2008 Anti-Monopoly Law.  SAIC recently released a statement indicating that this investigation is coming to an end, but Qualcomm may be facing a fine of over $1 billion.  Then, in July of this year, SAIC raided offices of Microsoft and its partner Accenture PLC throughout China in connection with an investigation into Microsoft’s alleged anti-competitive bundling of software. And during the last month alone, the National Development and Reform Commission (“NDRC”) accused Chrysler, Mercedes Benz, Volkswagen, and a dozen Japanese auto parts makers of various violations of the Anti-Monopoly law in connection with their pricing of auto parts.  So far, Chrysler and Volkswagen have been fined a combined $46 million, and the Japanese auto parts makers saw a record $200 million fine.   According to Bloomberg, since July, at least seven foreign automakers have announced price cuts following the NDRC investigation.  See China Levies Record Antitrust Fine on Japanese Firms (Aug. 20, 2014).

Increasingly, these actions are coming under scrutiny by U.S. and EU officials who suspect that China is selectively targeting foreign firms in an effort to prop up its own industry.  To assuage some of these concerns, earlier this month the NDRC released information about a recent $17.9 million fine of 23 domestic insurers in the Zhejiang Province as well as an industry group for allegedly implementing agreements to standardize car insurance discounts and commission fees.  But while this shows that there are at least some token examples of Chinese firms being held accountable, the SAIC and NDRC have a long way to go to persuade outsiders that they are being evenhanded.