On Sept. 11, 2014, Hubei Price Bureau announced that it recently imposed a fine of 249 million RMB (US$40 million) on FAW-Volkswagen Sales Company Ltd. (FAW-Volkswagen) and a fine of 30 million RMB (US$5 million) on eight Hubei Audi dealers for unlawful price fixing under the Anti-Monopoly Law (AML).
The investigation was initiated in March 2014 by the Hubei Price Bureau under the guidance of China's National Development and Reform Commission (NDRC). It revealed that since 2012, FAW-Volkswagen had repeatedly arranged for 10 Audi dealers in Hubei to reach and implement monopolistic agreements on prices of whole vehicle sales, service and maintenance. The investigation also found FAW-Volkswagen had issued administrative documents and formed a work group to urge the dealers to follow its price-management measures.
In addition, the Price Bureau found that since 2013, some Audi dealers in Wuhan separately reached and implemented monopolistic agreements on prices of vehicle sales. The Price Bureau found that FAW-Volkswagen's acts constituted "fixing the prices of commodities resold to a third party" and "restricting the lowest prices for commodities resold to a third party," while the 10 Hubei Audi dealers' acts constituted "fixing or changing commodity prices," violating the AML. FAW-Volkswagen was fined 6 percent of its sales revenue in the relevant market in the previous year; seven Audi dealers were fined 1 percent or 2 percent of their previous year's revenue. For the two dealers that voluntarily reported information about the agreements and provided important evidence, one was exempted from fines and the other was fined only 0.5 percent of its previous year revenue. One company that quickly corrected its minor infraction and did not cause damages received no fine.
The Hubei Price Bureau's decisions are not currently available, but the official news is available here.
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