China Fines Eyeglass Lens and Contact Lens Makers for Alleged Price Fixing

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BEIJING—A Chinese regulatory agency imposed fines totaling more than 19 million yuan ($3 million) against Essilor, Nikon, Johnson & Johnson, Bausch + Lomb, Carl Zeiss and other eyeglass and contact lens makers for allegedly fixing prices and engaging in antitrust behavior.

The agency, the National Development and Reform Commission (NDRC), said on its website yesterday that it levied the fines after an investigation found the companies were exerting too much control over prices. It said some of the companies restricted retail prices and used tactics such as improperly controlling the terms of product promotions such as "Buy 3 Get 1 Free." The other companies named in the investigation— Hoya and Shanghai Weicon Optics Co. and TAG Heuer (Shanghai) Optical Co., and Shanghai Wei Kang Optical Co.—were exempted from the fines, the agency said.

The largest penalty, 8.6 million yuan, was levied against Shanghai Essilor Optical Co., Essilor International’s Chinese business unit, amounting to approximately 2 percent of the company’s sales last year. Nikon, which is operated through a joint venture with Essilor, was fined 1.7 million yuan, according to the NDRC.

“The fine is a result of an inquiry on resale price level practices conducted by the Chinese authorities in many sectors and many companies. Essilor complies with applicable laws and Essilor fully cooperated with the authorities from the start of the inquiry. Distributors in China are free to fix their resale prices,” an Essilor spokesperson told VMail.

In response to Bausch + Lomb 3.7 million yuan fine, Laurie Little, senior vice president, investor relations for Bausch + Lomb’s parent company, Valeant Pharmaceuticals International, told VMail, “The NDRC determined that Bausch + Lomb’s 2012 contracts with contact lens distributors contained a provision relating to suggested retail prices and that such a provision violated Chinese antitrust laws.

"NDRC investigated this issue across the lens industry in China and Bausch + Lomb fully cooperated with the authorities. Bausch + Lomb changed its language in 2013 to address this issue prior to the investigation. The potential fine was up to 10 percent of annual sales, but given Bausch + Lomb’s full cooperation with the NDRC and Bausch + Lomb’s voluntary changes and training to address the matter, Bausch + Lomb was only fined 1 percent on 2012 sales of contact lenses in China.”

The NDRC fined Johnson & Johnson 3.6 million yuan. “Johnson & Johnson Vision Care (Shanghai) Ltd is committed to fully comply with China’s AML and the AML-related directives of the National Development and Reform Commission (NDRC),” said Gary Esterow, senior director, global communications and public relations for Johnson & Johnson Vision Care. “The company has cooperated fully with the NDRC and Shanghai Price Inspection and Anti-Monopoly Bureau in their investigation. We take seriously the findings of the decision, and will take corrective and preventive measures accordingly.”

Carl Zeiss was fined 1.766 million yuan. A spokesperson for Carl Zeiss was not available to comment at press time.