(Yicai Global) Dec. 26 – China's competition and price regulators have fined a Shanghai-based joint venture sales company of the American General Motors Corporation CNY201 million (about USD29 million) for creating price monopoly.
The National Development and Reform Commission, China's macroeconomic management agency, issued a notice on Dec. 23, saying the Shanghai Price Bureau will impose a penalty totaling CNY201 million on SAIC General Motors Sales Co. based on 4 percent of the sales of products involved in the previous year.
Shanghai Price Bureau found that the company violated relevant provisions of Article 14 of the Anti-Monopoly Law of the People's Republic of China on prohibiting business operators and their trading parties from entering a monopoly agreement for "restricting the minimum price of commodities for re-sale to a third party." It said the company, therefore, eliminated and restricted price competition in the market.
The company, in the form of documents issued to its distributors, fixed minimum sales prices for some GM models, monitored the distributors' actual sales prices through a variety of means and penalized some distributors which violated its price monopoly, the Shanghai Price Bureau said.
SAIC-GM Auto Sales Company Ltd. is a joint venture set up by the American General Motors Corporation [NYSE:GM] and SAIC Motor Corporation Ltd. [SH:600104], with 49 percent and 51 percent stakes respectively. It is mainly engaged in product distribution.