Are China’s Antitrust Probes Unfairly Targeting U.S. Firms?

A new paper by the U.S.-China Business Council accuses China of violating due process in its zeal to shore up local businesses and markets.
Iris DorbianSeptember 3, 2014

Due process concerns about antitrust regulation in China are being raised in a paper issued Wednesday by the U.S-China Business Council. The council suggests that China is unfairly targeting American companies in an attempt to tamp down overseas competition while boosting homegrown businesses.

US-ChinaThe USCBC charges that China’s antitrust regulators strong-arm companies not to use lawyers during probes and to “admit guilt” and “make statements without being informed of the grounds for investigations,” according to Reuters.

The complaints are far from new. Last year Reuters reported that “companies had been warned by tough-talking regulators not to use external lawyers during probes.” And this past April, the U.S. Chamber of Commerce said in a letter to Secretary of State John Kerry and Treasury Secretary Jacob Lew that U.S. lawmakers need to crack down on China’s use of its competition policy, which “it said had been seized [on] by China to advance its industrial agenda and nurture domestic companies,” according to Reuters.

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In a recent survey, the USCBC found that an overwhelming majority of respondents (86%) were concerned about China’s anti-monopoly enforcement. To vindicate its actions, China has been invoking its 2008 Anti-Monopoly Law.

Although both Chinese and foreign firms have been subject to scrutiny under the law, Reuters notes that recently regulators have focused their attention more heavily on overseas businesses.

China has dismissed the accusations, insisting that investigations by its three antitrust regulators — the National Development and Reform Commission, the Ministry of Commerce and the State Administration for Industry and Commerce — “are conducted according to law.”

Among the U.S. firms that have been investigated under China’s AML are software heavyweight Microsoft and San Diego-based semiconductor firm Qualcomm.

The latter has been accused of “overcharging and abusing its market position in wireless communication standards,” says Reuters. The penalty could result in fines exceeding $1 billion.

Source: U.S. business group raises due process concerns over China antitrust probes