China fines Ford $24m on heels of FedEx probe

Date: Wednesday, June 5, 2019
Source: Nikkei Asian Review

Antitrust case against US automaker comes amid trade war volleys

BEIJING -- Chinese authorities levied a 162.8 million yuan ($23.6 million) fine against Ford Motor's local joint venture on Wednesday for violating antitrust laws, just days after reports that regulators had begun an investigation into FedEx.

Changan Ford Automobile, which the U.S. carmaker operates jointly with state-owned Chongqing Changan Automobile, had ordered dealerships in the Chongqing metropolitan area to set minimum resale prices on vehicles since 2013, the State Administration for Market Regulation said.

That practice harmed competition and the interests of consumers, according to the regulator. The fine is equivalent to 4% of the venture's annual sales in Chongqing.

The enforcement action comes amid trade frictions between Washington and Beijing, with a source close to the case saying that "they are making an example out of Ford."

The move followed a report Saturday that regulators launched a probe against U.S. company FedEx for rerouting packages belonging to Huawei Technologies without first notifying the Chinese telecom manufacturer. CCTV, the state broadcaster, called the probe a "warning" to foreign operators that violate national rules and regulations.

The U.S.-China trade war has ensnared businesses in a battle over technological supremacy. Washington recently placed Huawei on a blacklist that essentially bans exports of American-made components to the company.

The penalty against Ford echoes the 2016 antitrust case launched by Shanghai municipal officials against General Motors' joint venture. That unit incurred a 200 million yuan fine for selling vehicles at minimum price points. Last year, U.S. chipmaker Qualcomm withdrew its proposed $44 billion buyout of Dutch peer NXP Semiconductors after failing to receive approval from the state regulator.

 

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