Automotive Industry Anti-Monopoly

Automotive industry anti-monopoly refers to legal regulations and enforcement activities implemented by the state to prevent and curb monopolistic practices across the automotive supply chain, safeguarding fair market competition and consumer rights. As the automotive industry shifts from "volume-driven growth" to "market share battles in a saturated market", anti-monopoly oversight is expanding from traditional crackdowns on horizontal price-fixing cartels to emerging areas such as data misuse, algorithmic collusion, and intellectual property abuse, serving as a vital force in maintaining market order and driving high-quality industry development.

Regulatory Framework

The legal foundation for anti-monopoly regulation in the automotive sector primarily comprises the Anti-Monopoly Law of the People's Republic of China (2022 Revision) and its supporting provisions, alongside the industry-specific Anti-Monopoly Guidelines on the Automotive Industry (revised and issued by the Anti-Monopoly Commission of the State Council in 2023).

Monopolistic practices prohibited under the Anti-Monopoly Law fall into three categories: business operators concluding monopoly agreements (including horizontal monopoly agreements, such as price-fixing and market allocation between competitors; and vertical monopoly agreements, such as resale price maintenance); abuse of dominant market position (such as unfair excessive pricing, refusal to deal, and tying/bundling); and concentration of undertakings that has or may have the effect of eliminating or restricting competition.

Tailored to the nuances of the automotive industry, the Anti-Monopoly Guidelines on the Automotive Industry refine the assessment criteria for vertical monopoly agreements and establish a clear "safe harbour" rule for vertical price restrictions—where market shares below a prescribed threshold are presumed not to constitute a monopoly agreement, providing businesses with clear and predictable compliance benchmarks. The rollout of these guidelines marks a shift in automotive anti-monopoly oversight from "case-by-case enforcement" to "institutionalised regulation".

Key Regulatory Focus Areas and Notable Cases

Vertical monopoly agreements (resale price maintenance) remain the most prevalent anti-competitive practice in the automotive sector, wherein suppliers (OEMs/carmakers) enforce minimum resale prices on authorised dealers. Notable cases include: in 2014, a German premium marque was slapped with a RM201,000,000 fine for restricting minimum dealer resale prices across Jiangsu Province; in 2016, a Japanese carmaker was fined nearly USD 60,000,000 in North America for restricting dealer resale pricing. In 2026, the State Administration for Market Regulation (SAMR) took action against FAW Toyota Sales Co., Ltd., imposing a fine of approximately RM87,610,000 for dictating minimum resale prices to dealers in Jiangsu Province via commercial policy terms.

Horizontal monopoly agreements (collusion among competitors) face equally stringent enforcement. In 2023, SAMR initiated an anti-monopoly probe into a German marque and its Chinese joint-venture partner over allegations of orchestrating a "secret cartel" alongside four other Chinese carmakers to fix procurement prices for key raw materials like steel and rig supplier selection between 2020 and 2021, in suspected breach of anti-monopoly legislation.

On the abuse of dominant market position, the rise of intelligent connected vehicles (ICVs) has turned data and algorithms into fresh battlegrounds for anti-monopoly watchdogs. Regulators are keeping close tabs on whether tech giants and carmakers commanding massive vehicle data troves or dominating in-car infotainment operating systems engage in refusal to deal, unfair bundling, or discriminatory treatment. In 2026, SAMR introduced new guidelines targeting exclusionary and anti-competitive practices, such as carmakers enforcing "choose-one-of-two" exclusivity via in-car head unit systems.

2026 Special Enforcement Campaign

In 2026, SAMR designated the automotive sector as a key annual priority, rolling out the Special Enforcement Campaign on Automotive Industry Anti-Monopoly. The initiative centres on three main fronts: curbing monopoly agreements and the abuse of dominant market positions—with strict audits across vehicle assembly, auto parts manufacturing, vehicle sales, and aftersales networks; ramping up enforcement in consumer-centric sectors—targeting price-fixing and anti-competitive practices; and intensifying oversight in emerging domains—tightening scrutiny on the use of data, algorithms, and technical lock-ins to forge cartels or abuse market dominance.

This special operation works in tandem with industry governance measures rolled out by the Ministry of Industry and Information Technology (MIIT). In July 2026, MIIT explicitly instructed carmakers to curb irrational price wars and beef up safety assessments for advanced driver assistance systems (ADAS). Together, the two ministries establish a comprehensive oversight loop spanning "market conduct" to "vehicle safety"—with anti-monopoly enforcement stamping out disorderly market competition, while vehicle type approvals and recall mechanisms guarantee product compliance, jointly steering the automotive industry from destructive price cuts toward value-driven competition.

Unique Dynamics of Automotive Anti-Monopoly Regulation

Anti-monopoly enforcement in the automotive industry presents three distinct characteristics not commonly seen in other sectors:

Extended supply chains and intricate vertical linkages: Spanning tier-1 parts manufacturing and complete vehicle assembly to retail, servicing, auto financing, and motor insurance, the multi-tiered vertical relationships make covert anti-competitive agreements hard to detect and evidence challenging to secure.

Aftersales lock-in effect: Once a vehicle is purchased, owners face high switching costs for routine servicing, repairs, and genuine replacement parts, resulting in an "aftersales lock-in" that hands manufacturers leverage to stifle aftermarket competition.

Double-edged nature of emerging tech: While telematics and over-the-air (OTA) software updates enhance user convenience, they can also serve as discreet conduits for algorithmic collusion or exclusionary behaviour—such as OEMs remotely tweaking vehicle performance parameters via OTA updates to marginalise rival offerings or harvesting market intelligence through connected head units.

Industry observers emphasise that automotive anti-monopoly oversight has moved far beyond traditional retail price controls; governing data monopolies and tackling algorithmic collusion in the era of smart connected mobility now represent the most pressing challenges for regulators.