China Exerts Anti-Trust Pressure on Foreign Firms

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Aug. 18 (Bloomberg) -- Sebastien Evrard, partner of antitrust practice at Jones Day, talks with Angie Lau about pressure on foreign companies by the Chinese government as it intensifies an anti-trust crackdown in the nation. He speaks on “First Up.”

Lawyer --, a partner at a legal firm, to put this in context for us.

When you take a look at all the headlines that have been coming out of china against foreign companies, there really seems to be a very firm trend, focused, targeted against foreign companies doing business in china.

Indeed, that is true.

It is clear that foreign companies are under much tighter scrutiny nowadays in china.

The big question is whether you -- it is the result of a deliberate decision by the government to go after foreign companies or it is simply because the industries under investigation are led by foreign companies.

You look at high-tech industries , mostly led by foreign companies, the same for the car industry.

The major players are all foreign.

We don't know whether there is a correlation between the fact that foreigners are under investigation and the fact that they are foreigners.

Because the antimonopoly investigations have been a couple of years in the running.

That is true.

It was adopted six years ago.

In the very beginning, enforcement was not much.

I think what the government is doing now is sending a signal that is going to be -- it is going to be very serious about enforcing the anti-monopoly law against foreign companies and local companies.

You say it is hard to say whether or not companies like microsoft and auto makers and automakers and all the rest are being targeted.

Foreign companies are being targeted here it over the weekend, in fact, a very rare public backlash from the european chamber of commerce in china, basically saying that they are getting anecdotal stories from their members that they are being targeted, that the chinese investigators are saying you better not be calling in your lawyers, you better cooperate with investigations.

And these tactics seem to be really aggressive.

It is true that what is happening in china is a little bit worrying.

We don't have in china the same rights of defense that you have in the u.s. or in europe.

It seems that the government is really using the anti-monopoly law also to be perceived as the good guy by consumers.

They investigated the baby milk industry.

That led to lower prices by baby milk producers.

They investigated contact lens producers.

Same result, lower prices.

Now the car industry.

Many car manufacturers have announced lower prices.

There is a big investigation into pharmaceutical companies.

Guess what is going to happen?

They will probably have to lower prices.

What about supporting domestic firms that are also competing in these exact same industries?

That is a good question.

One of the worrying trends we've seen over the last year is that chinese companies are -- especially in the high-tech industry, are using the anti-monopoly law to extract an advantage, vis a vis, for example, property -- intellectual property rights.

We've seen a company suing a u.s. company, saying your rates are too high, you are violating the anti-monopoly law.

They won in china.

We saw another one do the same a few weeks ago.

We know there are many other instances where chinese companies are using the anti-monopoly law to extract better terms.

Does this change the playing field for foreign firms question mark no longer can they expect to be guaranteed these extraordinary returns that they've been seeing under -- does this change the playing field for foreign firms?

No longer can they expect to be guaranteed these extraordinary returns that they've been seeing?

They are revisiting their licensing terms to make sure that they comply with the law am a that there cannot be any allegation that they are violating the anti-monopoly law.

What can foreign firms due to offset this -- these tactics am maybe try to protect themselves so that -- these tactics, maybe try to protect themselves so that they don't run afoul of anti-monopoly investigation?

Foreign companies are subject to antitrust laws in many countries.

It is not new.

What we've seen recently is that they are revisiting compliance guidelines.

They are starting to audit their processes to make sure nothing fell through the cracks, that

This text has been automatically generated. It may not be 100% accurate.


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