Hong Kong watchdog takes legal action against 2 cleaning firms for alleged price-fixing when bidding for public housing estate contracts

Hong Kong’s antitrust watchdog has launched legal proceedings against two firms accused of price-fixing when bidding for HK$180 million (US$23 million) worth of service contracts to clean public housing estates.

The Competition Commission revealed on Tuesday it was taking Hong Kong Commercial Cleaning Services (HKC) and Ma Shun Hong Kong & Kln Cleaning Company Limited (MS) to a tribunal over allegations they colluded with each other during the tendering process for the Housing Authority contracts.

The watchdog received collective complaints in December 2017 from workers at the companies detailing the alleged cartel-like behaviour.

Investigating under a search warrant, the watchdog found the two firms had exchanged commercially sensitive information for 17 tenders submitted to the Housing Authority between May 27, 2016 and August 21, 2018, to provide cleaning services on public housing estates. They were awarded nine of those contracts, worth HK$110 million in total.

There were instances of the same person handling financial documents and tendering proposals for both HKC and MS, while price quotations from both companies were found to be identical, according to the commission’s investigations.

Rasul Butt, the watchdog’s CEO, told a press conference on Tuesday that anticompetitive behaviour could negatively affect the livelihoods of ordinary workers and undermine the public procurement of services.

“Cleaning services are essential in both public and private housing estates and cartel conduct would potentially harm residents and the livelihoods of people working in this sector,” Butt said.

The two cleaning operators shared office premises and were on the same IT network.