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China has fined South Korean makers of LCD screens Samsung and LG - along with several Taiwanese manufacturers - nearly 23 million US dollars...
This is the first time that the country fines overseas companies for price-fixing on the mainland.
As China Report shows you, it's a strong signal that China will not tolerate foreign cartels any more and is committed to maintaining the market discipline by law.
PKG
A punishing penalty for Asia's electronic giants - accused of colluding on prices...
According to China's top price regulator on Friday, Samsung, LG and four Taiwanese makers of LCD display screens have been ordered to pay
22.9 million dollars in fines.
...And return 27.6 million dollars of extra payment to Chinese mainland buyers.
The government also confiscated 5.9 million dollars of their illegal gains.
The six companies were fined for price-rigging between 2001 and 2006.
The settlement is the highest paid by overseas companies in China, though smaller compared to those imposed by the United States and Europe.
Media reports say the U.S. Department of Justice has been awarded 1.4 billion dollars in fines by courts while EU officials have imposed a total of 1.7 billion dollars in penalties.
The Chinese regulator explains the difference came because China acted under its pricing law that bases penalties on the improper income from individual sales, while Western anti-monopoly laws base fines on a company's total revenue.
China's first anti-monopoly law was not enacted until 2008 and cannot be applied retroactively.
Considering the smaller amount, the move is symbolic rather than punitive.
It shows the country's firm stance against monopoly and commitment to the market economy under the rule of law.
Competition is the most effective means to enhance consumer welfare as it stimulates efficiencies and results in lower prices, better products and services, and choice for consumers.
Moreover, it breeds innovation, creativity and entrepreneurship.
The world's major economies have outlawed the creation of monopolies.
And protecting competition has become the norm in mature market economies.
After China opened up more than three decades ago, many foreign companies entered this huge market with a sense of superiority developed when local government officials welcomed these big taxpayers.
Some large multinational companies even took advantage of the country's slack supervision and lagging legislation.
For instance, Unilever (China) Co., Ltd. was fined merely 321,000 dollars in 2011 over statements it made regarding planned price hikes in China.
But in Europe, it was fined, together with another consumer goods giants Procter & Gamble, more than 415 million dollars for fixing washing powder prices during the same period.
The new leadership of China's ruling Communist Party has reiterated its adherence to the opening up and reform policy.
The first fine over foreign cartels is just the beginning of stricter law enforcement.
That means overseas companies in China should focus more on the future, instead of immediate earnings.
