Hong Kong Competition Commission to take several cases to court next year
Chairwoman Anna Wu insists they are not dragging their feet because the investigation process is time-consuming
A number of cases currently under investigation might be brought to court next year, Hong Kong’s competition watchdog said as the city marked the first anniversary of full implementation of the Competition Ordinance on Wednesday.
The cases are among nearly 1,900 complaints and inquiries the Competition Commission has received over the past year.
Wu said a common misconception was that one case applied to a single party. “Often when we investigate cartel behaviour, it involves five or six parties. So it’s like dealing with multiple cases at the same time.”
Chief executive officer Rose Webb said each complaint they received had to go through an initial assessment. Only 130 cases moved on to the second stage of further assessment.
“Even if we were not moving on at all, [the initial assessment] involves several months of research,” the Australian expert said.
One in 10 second-stage cases could reach the final phase of in-depth investigation, with an outcome likely by early next year, including the possibility of initiating proceedings in the Competition Tribunal.
Out of 20 trade associations deemed to face a high risk of violating the ordinance, 19 removed certain restrictions on their members. They included the Kowloon Pearls, Precious Stones, Jade, Gold and Silver Ornament Merchants Association which once issued a daily suggested gold price for jewellers.
Association president Lau Hak-bun said they had thought of applying for a block exemption, but they were taken aback by the high application threshold, which included a fee of HK$500,000.
“The association abandoned the plan as we did not even know how likely approval would be,” he said.
Looking ahead, Wu said the commission was looking at handling two to three new cases each year. “If it’s two or three cases in year one, you are talking about the same pending cases in year two, plus two or three more,” she said.
“So it’s not a question of us not doing things. It’s a question of being balanced with our approach and priorities.”
She said the nature of their investigative work was seldom disclosed due to sensitivity of information and the need to protect whistle-blowers. But she said about one in six complaints were related to bid-rigging.
Bidding for building renovation contracts made headlines in recent years, with a subcontractor jailed for 35 months in September for rigging a HK$260 million maintenance tender.
The commission is also conducting a market study on vehicle fuel, which critics say is prone to price fixing. However, under such a study the watchdog cannot conduct raids and demand the surrender of documents – unlike for formal investigations.
