China Hits Foreign Companies for Fixing Minimum Prices

China Hits Foreign Companies for Fixing Minimum Prices

Foreign companies take note. Anti-monopoly regulators in China have been fined medical device maker Medtronic $17 million. Medtronic is a supplier of diabetes, and cardiovascular medical devices. Authorities have found that it actively suppressed competition by putting in place minimum resale prices on its products, which its product distributors were required to charge.

Foreign automakers and dairy suppliers have been hit with similar Anti-monopoly penalties in China. While establishing minimum resale process is a common practice elsewhere around the world, Authorities in Beijing see this as an illegal competition practice.

According to China’s official planning agency, "Competition in China's high-value consumables and implantable medical equipment market is inadequate” and “increases the burden on patients and damages the interests of consumers."

China’s first anti-monopoly law was passed in 2008, and was welcomed by industry leaders at the time. However, in years since, there are clear signs that enforcement is more robust against foreign companies in China, rather than China domestic companies.

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