Hong Kong’s Competition
Commission has started proceedings in the Competition Tribunal against five IT
companies - including a subsidiary of BT - for alleged bid rigging.
The action represents the
first formal enforcement proceedings under Hong Kong’s new competition
legislation which came into force in December 2015.
The Commission maintains
that BT Hong Kong, Nutanix, SiS International, Innovix Distribution and Tech-21
contravened Hong Kong’s prohibition of restrictive agreements contained in the
First Conduct Rule of the Competition Ordinance by filing ‘dummy bids’ in a
tender organised by the Hong Kong Young Women’s Christian Association. The tender concerned the supply and
installation of a new IT server system.
Hong Kong has opted for a
judicial enforcement model in that the Commission investigates and brings
proceedings before the Tribunal which decides if there is a breach of the
relevant rules.
The Commission is seeking
remedies including financial penalties which can be up to 10% of the companies’
turnover for each year of the alleged infringement and a declaration that each
party breached the First Conduct Rule.
The case marks the first
significant enforcement case. Up to now some smaller cases have been resolved
through informal warning letters. It provides
an opportunity for the Tribunal to clarify the interpretation of the Ordinance
and may provide useful guidance on the meaning of key concepts in the
legislation, as well as on procedure.
The outcome of this case
will be important in securing the legitimacy of the new regime. In the earlier stages of competition
enforcement there is understandably a public expectation to secure ‘wins’. At the same time the Commission will tarnish
its reputation if it pursues cases which do not stand up to judicial scrutiny
before the Tribunal.
Source:
Competition Commission press release, Competition Commission takes bid-rigging
case to Competition Tribunal
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