China will strengthen anti-monopoly law enforcement and tackle price collusion behaviors in key areas affecting people’s livelihood and treat domestic and foreign companies on an equal footing, according to the nation’s top pricing regulator.
Some of the key industries include natural gas, pharmaceuticals, intellectual property and automobile manufacturing, where price-fixing behaviors often exert wide influence on people’s daily lives, according to the Price Supervision and Anti-Monopoly Bureau with the National Development and Reform Commission.
Other sectors include high-tech industries such as the manufacturing of storage chips for mobile phones. Prices of storage chips had risen at an astonishing pace over the past 18 months and triggered concerns at the regulator since December.
The government will issue more guidelines in key sectors to help companies understand China’s anti-monopoly rules and become alert to potential anti-trust risks, according to the commission. It will implement law enforcement treating foreign and domestic companies equally, according to the commission.
A number of prominent foreign companies have been fined for violating China’s antimonopoly rules. The highest fine issued by the commission was the 6-billion-yuan ($947.04 million) penalty imposed on Qualcomm in 2015.
Apart from companies involved in a number of key sectors mentioned by the agency, the government will strengthen anti-monopoly law enforcement by local governments and industry associations that may have been involved in administrative monopoly abuse, according to Wang Junlin, an antitrust lawyer at Beijing-based Yingke Law Firm.
For instance, the government might pay more attention to cartels among industry associations that collude with companies to fix prices, he added.
Early in July last year, the paper manufacturing industry association in Zhejiang province was found to be a price cartel of 17 local paper manufacturers, who organized meetings among themselves to discuss price increases for whiteboard sheet rolls. A fine of 7.8 million yuan was imposed on the participants involved in price-fixing behaviors.
Earlier this month, the commission established a new division in charge of restricting local governments from intervening in pricing behavior.
The new division will focus on dealing with local governments’ involvement in acts of issuing discriminatory terms for market entry or use of goods and services provided by preferred producers, according to the commission.