New Competition Ordinance Nets 14 Erring Firms

For the first time since Hong Kong enacted a new law to punish price-fixing, a tribunal has found 14 companies guilty of breaching the Competition Ordinance.

The Competition Tribunal found 10 renovation companies had fixed prices for projects at a public housing estate while in another case, four technology companies were found guilty of trying to rig a tender.

These were the first two cases that the Competition Commission brought before the tribunal after the ordinance came into effect four years ago.

The renovation companies were found guilty of working together in 2016 to fix prices for repair work at the newly-built On Tat Estate in Kwun Tong.

The tribunal earlier heard that the contractors had decided among themselves to divide the work, so that each firm would get four floors in every block. They had also agreed not to accept or actively seek business from tenants on other floors.

Their pricing arrangements were also identical.

In handing down judgement, the tribunal concluded that their action had prevented, restricted and distorted competition in Hong Kong and constituted serious anti-competitive conduct.

In a separate case, four technology companies were found guilty of bid-rigging in a tendering process by the Young Women’s Christian Association in 2016.

The case involved a tender issued by the YWCA for the installation of a new server system based on technology by Nutanix Limited.

While Nutanix's service partner BT had submitted a bid in the first tender, the process fell through due to an insufficient number of bids received.

During the next tender exercise the following month, Nutanix and BT arranged for four partners to submit dummy bids. Three of them did so in the end.

The tribunal said this amounted to bid-rigging which is a clear violation of the Competition Ordinance.

Further hearings will be held to determine the penalties for the various companies, as well as other cost-related issues.

The chairwoman of the Competition Commission, Anna Wu, welcomed the decisions. She said they have protected commercial interests as well as the public.