China's is unfairly targeting foreign firms in competition investigations, the American Chamber of Commerce in China says

China unfairly targets foreign firms says lobby group

Foreign companies feel they are being unfairly targeted by Chinese anti-competition regulators according to a US business lobby group.

In an effort to enforce a 2008 anti-monopoly law China has increasingly been targeting foreign firms, such as US chipmaker Qualcomm, Microsoft and a host of Japanese automakers, prompting the American Chamber of Commerce in China to become the latest business lobby to air its grievances over a series of investigations scrutinising at least 30 foreign firms.

There are growing perceptions that multinational firms are under "selective and subjective enforcement" using "legal and extra-legal approaches", the Chamber said in a report.

A survey of 164 members showed 49 per cent of respondents felt foreign companies were being singled out in recent pricing and anti-corruption campaigns, compared to 40 per cent in a late 2013 survey of 365 members, while 25 per cent said they were uncertain, or did not know, and 26 per cent said no.

Chamber Vice Chairman Lester Ross told reporters the major expansion of enforcement was welcome in principle, but regulators were using "extra-legal" means to conduct investigations.

"They have taken what are, in many instances, vague or unspecified provisions in the law and moved to enforce them, and sought to enforce those means through processes that do not respect the notion of due process or fairness," Ross said.

In an April letter to Secretary of State John Kerry and Treasury Secretary Jacob Lew, the US Chamber of Commerce urged Washington to get tough with Beijing on its use of anti-competition rules.

China had seized upon competition law to advance industrial policies that nurture domestic companies, the US Chamber, based in Washington, said in the letter.

The European Union Chamber of Commerce in China in August expressed its concern over the competition investigations, saying China was using strong-arm tactics and appeared to be unfairly targeting foreign firms.

But Xu Kunlin, director general of price supervision and the anti-monopoly bureau at the National Development Reform Commission (NDRC), reiterated that local and foreign companies were being treated equally by the agency.

"Such accusations are groundless and baseless," Xu told the official China Daily newspaper. "Some of the NDRC monopoly investigations involve overseas multinationals, but that does not mean that we are targeting them.

Xu said the NDRC, one of China's three antitrust regulators, was also handling cases involving state-owned firms and Chinese private sector companies.

"Some business operators in China have failed to adjust their practices in accordance with the anti-monopoly law," he added. "Others have a clear understanding of the laws, but they take the chance that they may escape punishment."

The automotive industry has been in focus for the last two or three years, Xu said. Last month, the NDRC slapped a record fine of $201m on 12 Japanese automakers it said had engaged in price manipulation.

The NDRC is investigating Qualcomm's local subsidiary after it said in February the company was suspected of overcharging and abusing its market position in wireless communication standards, accusations that could lead to record fines of more than $1bn.

Another antitrust regulator, the State Administration for Industry and Commerce, said yesterday it had given Microsoft 20 days to reply to queries on the compatibility of its Windows operating system and Office software suite amid its probe into the world's largest software company.

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