Mercedes guilty of price fixing

China said Monday it had found Mercedes-Benz guilty of price fixing, adding to the number of foreign carmakers entangled in wide-sweeping anti-monopoly investigations into the auto industry.

Regulators in the eastern province of Jiangsu said the carmaker, a luxury unit of Germany's Daimler, had abused its control over the supply of spare parts and maintenance services, state media reported.

"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," said Zhou Gao, head of the anti-monopoly unit investigating Mercedes.

Investigators said Mercedes-Benz inflated the cost of replacement parts and repairs so much that purchasing the components to build one Mercedes C-class car would cost as much as buying 12 new vehicles.

The report by the official Xinhua News Agency did not go into detail about what penalty Mercedes would face, although it did note that the company was not the first to be charged with violating a 2008 anti-monopoly law.

Audi, a subsidiary of Germany's Volkswagen, and Chrysler are also facing unspecified punishments for violating that law, officials have said.

China takes aim at foreign firms

Daimler said it was still "assisting" Chinese authorities but declined to comment on the charges.

"We are unable to comment further on what is still an on-going matter," the company said in a statement.

Kicked off with an Aug. 4 raid at one of Mercedes-Benz's sales offices in east China, the investigation was part of broader scrutiny of more than 1,000 companies in the Chinese auto sector, both foreign and domestic.

In recent years, the country's anti-monopoly authorities have taken aim at a number of industries, from pharmaceuticals to electronics.

Beijing has insisted that the probes have been in the interest of Chinese consumers, but critics maintain they are meant to bolster local industry in a foreign-dominated market.

In 2013, a number of foreign makers of baby formula lost their production permits after a push by Beijing to make domestic companies compete more with non-Chinese brands.

The license revocations came five years after melamine-tainted baby milk killed six infants and sickened 300,000 others, diminishing confidence in local milk powder producers.

cjc/uhe (AP, AFP, Reuters)