Foreign Firms under Chinese antitrust law 

It was only last month that 100 antitrust investigators probe simultaneously into four of Microsoft’s offices across China, executing “surprise visits” where the vice president and other managers were interrogated and data was collected.
It appears that Chinese regulators have actively expanding enforcement of the antimonopoly law causing fear to foreign companies that they could become targets for officials from agencies and local government who aim to impress President Xi Jinping.

“China’s not moving towards a free market, but it’s moving towards a wider palette of regulatory tools,” said Mr. Kennedy, director of the Research Center for Chinese Politics & Business at Indiana University. “These aren’t meant to create a level playing field; they obviously want the field to be slanted, but they want to use what I’d guess we call more sophisticated tools.”

Foreign companies worry of the rise of a newer form of protectionism in order to promote Chinese companies, especially the big, powerful state-owned companies. Yet, according to the government, the antimonopoly law, launched in 2008, is set to protect the interests of consumers against price gouging and other abuses.

“If China is going to be the third leg in the global antitrust regime, along with the U.S. and the E.U., and that’s clearly coming, then the key question is, What sort of approach is China going to take?” John Frisbie, president of the US-China Business Council in Washington, said in a telephone interview. “Is it going to be more the socialist state-run model, or is it going to be more of a market- and consumer-oriented model, or something in between? I don’t think we know the answer yet.”

For now, though, Microsoft and other foreign companies that cover sectors such as technology, car parts, pharmaceuticals and so on are on the defensive.
Late last week, The People’s Daily, the chief newspaper of the party, told foreign companies to get used to tougher scrutiny. “In the future, the focus on market order will continue to be constantly enhanced,” it said. “Every kind of business should adjust its behavior and thinking to this new regulatory normal.”

 

Source: NYT

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