Top pricing regulator fines US firm in antitrust probe

A logo sign outside of a facility occupied by Medtronic in Minneapolis, Minnesota on Oct 24, 2015.[Photo/IC]

China's top pricing regulator on Wednesday announced its decision to penalize US Medtronic for price fixing, the first penalty on a medical device maker handed down by the central authority.

Medtronic was fined for 119 million yuan ($17.27 million), 4 percent of the company's annual sales in 2015, due to violating the anti-monopoly law and eliminating market competition of medical device manufacturing industry, according to the National Development and Reform Commission.

The investigation discovered that since at least 2014 the company had fixed the resale price through monopoly agreements with it trading counterparts, namely its distributors.

Competition among distributors plays a key role in ensuring the formation of a reasonable market price at the time when high-end implantable medical equipment market competition is not sufficient in China, according to the commission.

The latest enforcement measure shows that the central authority has started to pay serious attention to vertical monopoly behaviors, including the marketing and distribution models, often times assumed to be not problematic, according to a source close to the commission.

Rather than targeting foreign companies, the commission" is conducting investigations to promote consumer welfare and economic efficiency," said Lu Yanchun, vice-director of price supervision bureau with the commission.

"The commission would enhance antimonopoly enforcement actions in the future and enhance pricing supervision."

The commission launched a nationwide antitrust probe in June this year, investigating companies both foreign and domestic companies in varies fields.