China is Accusing Mercedes of Being a Monopoly

Government / 86 Comments

The hypocrisy continues.

Earlier this month word came out that the Chinese government was punishing Audi and Chrysler for participating in monopolistic behavior. This coming from a country where nearly every major corporation is state-owned. Nice. Anyway, China's National Development and Reform Commission (NDRC) isn't done targeting foreign automakers. Now it's Mercedes' turn. The NDRC has decided that Mercedes-Benz violated anti-monopoly law by charging excessive prices for parts.

"Mercedes-Benz is a typical case of vertical price fixing – that is, the use of its dominant position in after-market parts to maintain price controls," stated Zhou Gao, chief of the Jiangsu price agency's anti-monopoly unit. All Mercedes said in response was that it was "assisting authorities." OK, so it's not at all unreasonable to go investigate and punish corporations for being monopolies and forcing consumers to pay more than they should. But isn't China itself one big monopoly? For example, if you were to buy Chinese stocks, you're pretty much financing the Chinese government. That's right: eight out of Shanghai's top ten stocks are government owned.

So what can automakers do to settle this issue? Doesn't look like much, except to cooperate if they want to continue doing business in the fastest growing market in the world. Audi, for example, cut prices for replacement windshields by up to 38 percent. Chrysler also plans to lower the prices of imported vehicles. Mercedes is likely to follow suit.

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