Hong Kong decorators accused of fixing public housing estate prices
Commission says companies breached law by sharing renovation market between them
Ten decoration and engineering companies in Hong Kong have been accused of breaching competition law by working together to fix prices and share the renovation market on a new public housing estate.
As well as price fixing and agreeing among themselves on bidding for renovation work at Phase One of On Tat Estate in Kwun Tong, the Competition Commission also accused them of offering “package prices” for decoration of the flats.
The commission on Monday took legal action against all 10 companies at the Competition Tribunal.
It was the second case the commission had brought to the tribunal following a bid-rigging case filed in March after five technology companies were accused of bid-rigging in a tendering process by the Hong Kong Young Women’s Christian Association in July last year.
“The commission is seeking remedies including pecuniary penalties and a declaration that each party has contravened the first conduct rule of the ordinance,” the commission said in a statement on Monday.
On Tat Estate is a public rental housing estate, which received the first batch of about 2,600 families to three of its blocks in June last year. Some 9,200 families live in the 11 blocks there.
According to the commission, from around June to November last year, the companies agreed among themselves to allocate floors of each block and not to seek business from tenants on another floor.
Kwun Tong district councillor Choy Chak-hung said he was pleased to learn of the commission’s action. He urged the Housing Department to drop its practice of offering a list of decoration contractors to tenants.
“Tenants are misled to think those on the list are department-approved contractors and tend to choose among those on the list,” said Choy, “Tenants should be encouraged to shop around and hire contractors that suit them.”
Commission chairwoman Anna Wu Hung-yuk said: “Market sharing and price-fixing are serious anti-competitive practices which lead to reduced choices and high prices, hurting consumers, other businesses and the economy as a whole.
“The commission accords priority to combating conduct which is particularly egregious and when the people directly affected belong to low income groups such as the residents of the relevant public housing estate.