China Cracks Down on Price Fixers

China opened yet another front in its fight against inflation with new regulations aimed at price fixing by dominant businesses. Citing a statement by the National Development and Reform Commission, the Wall Street Journal reported that new regulations that will come into force on February 1 will prohibit competing companies from fixing prices and business partners from setting minimum resale prices.

 

"Companies that have a so-called dominant market share will be barred from charging 'unfairly high prices' for their goods, and from paying 'unfairly low prices' for inputs," said the Journal. "Various anticompetitive pricing strategies by companies with a dominant market share will also be prohibited, including pricing goods below their production cost, using special rebates to force out competitors and discriminatory pricing between similar customers."

 

The new rules clarify the provisions of the Anti-Monopoly Law that took effect in 2008, which had been criticised by some foreign quarters for supposedly targeting acquisitions by foreign companies of domestic enterprises. In 2009, regulators cited the law in rejecting Coca-Cola's US$2.4 billion purchase of Cina Huiyuan Juice Group.

 

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