Chinese authorities have determined that Mercedes-Benz is guilty of price manipulation practices in the country.
Mercedes-Benz, the luxury car arm of Daimler AG, was found to be in violation of anti-monopoly laws and was excessively charging for car parts.
According to the Xinhua News Agency, Mercedes-Benz engaged in vertical price-fixing through its abuse of control on replacement parts supply.
"Mercedes-Benz is a typical case of vertical price fixing - that is, the use of its dominant position in after-market parts to maintain price controls," said Jiangsu price agency anti-monopoly unit chief Zhou Gao.
An investigation by the Jiangsu agency revealed that the prices of car parts were so excessive that individually purchasing the parts of a Mercedes C-class vehicle would turn out to be the equivalent of purchasing 12 units of the said car.
Several industries, ranging from food companies to technology firms, have gone under scrutiny in China as the country escalates its efforts to force businesses to comply with an anti-monopoly law that was issued in 2008.
The 2008 law allows China's National Development and Reform Commission to serve as the country's antitrust regulation body and impose penalties of up to 10 percent of the revenues in China for companies that will be proven to have incurred violations.
The automobile industry has been particularly targeted by investigations due to overpricing practices, prompting car companies such as Mercedes-Benz, Audi and BMW to drastically reduce the prices of car parts over the past several weeks.
The penalty that would be imposed on Mercedes-Benz has not yet been determined.
Earlier in the month, the NDRC came to the conclusion that Audi and Chrysler will be fined for monopoly practices, with the penalty on Audi to be about $40.7 million.
Industry analysts have said that car companies in China have too much control over car dealerships and car part suppliers in the country, allowing them to manipulate prices in violation of China's antitrust regulations.
However, the European Union Chamber of Commerce in China said last week that the group is concerned on how foreign companies may be "disproportionately targeted" by antitrust regulators, after the chamber received several reports of the regulators using intimidation tactics to put pressure on foreign companies into accepting penalties without going through the full legal process or involving their home governments.
"Competition law should not be used as an administrative instrument to harm targeted companies or serve other aims, such as administratively forcing price reductions," said the chamber.
