On 14 August 2017 the HKCC announced that it brought its second case before the Competition Tribunal against ten construction and engineering companies (or their representatives) for engaging in market sharing and price fixing conduct in the provision of renovation services at a public rental housing estate. The HKCC is seeking: (i) pecuniary penalties; (ii) a declaration that each party has contravened the First Conduct Rule of the Competition Ordinance (which prohibits anti-competitive agreements); (iii) an order against each party to pay to the Government the costs of investigation by the HKCC; and (iv) the costs of the proceedings before the Tribunal.
First, the alleged market sharing conduct concerned the allocation by the contractors amongst themselves of specific floors of the housing estate project, whereby they would not actively seek, or accept business, from tenants on floors allocated to other contractors and/or would direct such tenants to the allocated contractor of that floor. Second, the alleged price-fixing conduct concerned the joint production and use of promotional flyers in advertising decoration works, which contained package prices for different services (Flyer Prices) and were used by all the relevant contractors. The HKCC alleges this therefore either determined the transaction price (where prices were not further negotiated) or influenced the transaction price by either using the Flyer Prices as the starting or reference point for negotiations or giving the impression that the Flyer Prices were indicative of “standard pricing” or that all contractors charged similar prices.
The ten construction and engineering companies stated as the respondents to the HKCC’s application are W. Hing Construction Company Limited, Sun Spark Construction Limited, Mau Hang Painting & Decoration Co, Tai Dou Building Contractor, Kam Kee Machine Electrical Iron Works Company Limited, Hip Yick Construction Company, Tai Wah Civil Engineering, Wai Sun Iron & Decoration Co, Wide Project Engineering & Construction Co and Luen Hop Decoration Engineering Co Limited. In some cases, specific individuals have been named on the originating notice of application as well as the trading companies.