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ASSOCIATED PRESS

Chinese authorities have found Mercedes-Benz guilty of price fixing. The German car manufacturer was found to have manipulated the price of replacement parts, following an investigation conducted by the Chinese authorities.

China's official Xinhua News Agency reports that regulators discovered the car company had abused its control over supplies of spare parts for its cars.

Audi, BMW and Chrysler are also under scrutiny following anti-monopoly action by the authorities. Other foreign companies which have been put under the spotlight include those producing technology, pharmaceutical and food products.

In response to measures taken by the authorities, the European Chamber of Commerce in China last week stated that its members were looking into whether foreign businesses were being unfairly targeted, writes the BBC.

The report from the Xinhua News Agency stated that investigators in the eastern province of Jiangsu discovered that prices were so inflated that buying the required parts to make one C-Class would cost the same as buying 12 complete cars.

"Mercedes-Benz is a typical case of vertical price fixing - that is, the use of its dominant position in after-market parts to maintain price controls," said the chief of Jiangsu's anti-monopoly unit, Zhou Gao, according to Xinhua.

Daimler, Lexus and General Motors have all been assisting Chinese authorities in ongoing investigations. Other businesses including Microsoft and US microchip manufacturer Qualcomm are also being investigated.

BBC Shanghai's John Sudworth said: "Over the past decade or so Chinese consumers have shown an unquenchable thirst for luxury cars - price no object.

"The monopoly that the foreign multinationals really exercise is a perceived monopoly on quality. And as a result, to some extent, they've been able to charge what they like."