Chinese Authorities: Mercedes-Benz guilty of price-fixing

China has found Mercedes-Benz guilty of price manipulation as a result of an investigation into the business practices of a number of automakers and car part suppliers.

Reuters says that a specific punishment has not yet been determined, but under the authority of a 2008 law passed to combat monopolistic practices, the company can face a penalty as severe as a fine equivalent to 10 percent of the previous year's revenue.

A number of other auto companies are also under scrutiny, including Volkswagen, Audi and BMW.  The Chinese authorities have already levied a fine of $40 million on Audi for monopolistic practices. Audi is China's best-selling luxury vehicle made internationally.

The investigations and fines are under the jurisdiction of the National Development and Reform Commission.  The NDRC launched its investigation into automotive parts pricing after media investigations and consumer complaints that alleged Chinese consumers were being overcharged for automotive parts.

In response to the investigations by the NDRC, Mercedes has said it will lower the price of its parts by an average of 15 percent. BMW has announced price cuts of nearly 20 percent. Audi has not made public how much it will lower the prices for its parts.

Reuters said the changes could affect BMW's pretax profit by 1 percent in 2015. Volkswagen's profits could fall as much as 3 percent.

Reuters says the price manipulation was so great, that the cost of replacing a Mercedes-Benz C-Class model part-by-part could cost more than 12 times the cost of purchasing an entire new vehicle.

The announcement that Mercedes was found guilty comes just weeks after Chinese authorities from the NDRC raided the Chinese offices of DaimlerChrysler, the parent company of Mercedes-Benz.

Chines government authorities are also investigating uncompetitive business practices at Microsoft and GlaxoSmithKline.