South Korea's antitrust watchdog said Tuesday that it has slapped a combined 1.78 billion-won ($1.57 million) fine on Mercedes-Benz Korea and its dealerships for fixing labor costs for auto repairs.

Mercedes-Benz Korea, the local unit and importer of German carmaker Daimler AG, allegedly suggested to eight dealerships fixing rates for labor costs in January 2009 to improve its balance sheet, according to the Fair Trade Commission.
 
A few months later, the dealers, including Hansung Motor Co. and Class Hyosung, raised the rate and set the same prices for their repair services.

All eight companies set the same 58,000 won per hour for general repair work and 55,000 for maintenance services.

The FTC imposed a 1.32 billion-won fine on Mercedes-Benz Korea and a combined 468 million won on the eight dealerships.

The watchdog said that it will strictly crack down on price-rigging practices in the imported car sector, which accounts for some 15 percent of the country's passenger car market. (Yonhap)