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Admit guilt now or risk legal action, competition watchdog tells errant Hong Kong firms

Competition Commission is probing more than 15 cases after receiving 2,500 complaints and queries since the city instituted competition laws two years ago

PUBLISHED : Wednesday, 22 November, 2017, 6:11pm
UPDATED : Wednesday, 22 November, 2017, 9:37pm

Risk getting caught or turn yourself in now if you want leniency or even immunity, Hong Kong’s competition watchdog warned businesses on Wednesday as it identified three industries with numerous accusations of market sharing.

Telecommunications, real estate and property management, and machinery and equipment companies were among some 2,500 complaints and inquiries sent to the Competition Commission since competition laws came into effect two years ago.

It assessed 160 of the complaints and conducted in-depth investigations for roughly 10 per cent of the cases, the last step before it proceeds to file charges against the errant firms at the Competition Tribunal.

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Businesses convicted of anti-competitive practices would face a fine of up to 10 per cent of their local turnover for a maximum of three years.

But the commission said it was open to striking a deal with offenders prepared to admit their guilt. They could come forward on their own in exchange for leniency. The first party to come forward would have a chance to avoid penalties.

Those who did so later could still seek a reduction in penalties, depending on the circumstances.

“Of course, they have to provide substantial information or evidence, such as details of meetings, or documents which would assist with our prosecution efforts,” Rasul Butt, the commission’s senior executive director, said.

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Ten construction and engineering firms were taken to the Competition Tribunal this August over alleged market sharing and price fixing in the provision of renovation services at Kwun Tong’s On Tat Estate.

The companies agreed among themselves to carve up each block by floors and only approach tenants on their allocated floors. The commission also accused them of conspiring to fix prices.

“This is a classic example of how firms could engage in market sharing,” Butt said.

He explained that market sharing hurt consumers’ interest by limiting choices for them and reducing pressure on businesses to keep prices competitive.

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The commission noted Hongkongers may be less familiar with market sharing cartels than bid rigging or price fixing practices, and said it hoped to heighten awareness with a new publicity campaign, which encourages whistle-blowers to come forward. It launched the campaign on Wednesday.