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Audi says it will "accept penalty" in China anti-monopoly probe

German luxury car brand Audi will accept punishment from Chinese authorities for breaching anti-monopoly laws in the world's largest auto market, it said Monday (Aug 11).

SHANGHAI: German luxury car brand Audi will accept punishment from Chinese authorities for breaching anti-monopoly laws in the world's largest auto market, it said Monday (Aug 11).

An investigation by Chinese authorities found that an Audi dealer network had "violated national anti-monopoly laws", the brand's China arm said in a statement, adding the Audi joint venture involved had "closely cooperated with the investigation and will accept a penalty".

China has recently launched probes into alleged wrongdoings by a host of foreign firms in multiple different fields, among them pharmaceuticals, technology and baby milk.

The statement came after China's National Development and Reform Commission (NDRC), which polices violations of "anti-monopoly" law, said it had been investigating the auto sector - dominated by foreign companies and their joint ventures - for more than two years.

Last week it pledged to punish Audi, and Chrysler of the US, now part of Italy's Fiat group, without stating what penalties they would receive.

China considers using a dominant market position to set prices as a form of monopoly. Violators' "illegal gains" can be confiscated, and they can be fined up to 10 percent of their sales revenue in the previous year.

Audi is owned by the German car firm Volkswagen, which set up a joint venture with Chinese auto giant FAW to manufacture Audis and other models.

"Management processes in the sales and dealership structure are getting improved to prevent similar incidents in the future," the Audi China statement sent to AFP added. It did not explicitly state that Audi acknowledged any wrongdoing. But it added: "Audi and FAW-Volkswagen attach great importance that all applicable antitrust and competition laws are adhered to."

China has become critically important to foreign carmakers, given the size of the market and weak sales elsewhere in the world. China's full-year auto sales hit 21.98 million vehicles last year, when a recovery in Japanese brands offset the impact of slowing economic growth.

The inquiry into carmakers comes as the State Administration for Industry and Commerce (SAIC), which also enforces the anti-monopoly law, investigates US software giant Microsoft for allegedly operating a monopoly.

In another chill for US tech firms, state media have said China is planning to announce chip maker Qualcomm has monopoly status in the mobile phone chip market.

Foreign pharmaceutical companies including Britain's GlaxoSmithKline (GSK) have also been the target of wide-ranging investigations.

Others businesses, such as Apple and Starbucks, meanwhile, have sometimes received unfavourable coverage in state media over issues regarding service and pricing.

The moves have prompted fears from investors that overseas companies are being especially targeted, but China said Saturday that its anti-monopoly law does not discriminate between domestic and overseas companies.

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