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In brief

  • HKCC appeals for larger fines in renovation cartel

The authority is seeking an appeal to increase the penalties imposed on two contractors who were found to have engaged in cartel conduct.


This update was published on 13 April 2021, as part of our quarterly newsletter, Asia Pacific Competition Highlights. Click here to access the full report, which covers the most notable antitrust developments across 10 Asia Pacific jurisdictions.

HKCC appeals for larger fines in renovation cartel

The authority is seeking an appeal to increase the penalties imposed on two contractors who were found to have engaged in cartel conduct.

The two contractors, Fungs E & M Engineering and Dao Kee Construction were among six contractors and three individuals who the Tribunal determined to have contravened competition law. The parties were found to have engaged in cartel conduct concerning the renovation flats in a subsidised housing estate in Kowloon, Hong Kong. Fungs and Dao were fined HKD 598,000 (approx. USD 77,000) and HKD 341,000 (approx. USD 44,000), respectively, in a penalties judgment in January 2021.

The HKCC is seeking from the Courts of Appeal for fines of HKD 855,000 (approx. USD 110,000) and HKD 682,000 (approx. USD 88,000) to be imposed on Fungs and Dao respectively instead. The HKCC argues in its appeal that the Tribunal was wrong to have applied discounts based on the conclusion that the two contractors had engaged sub-contractors for the project and only received part of the profits generated. The appeal argues that both the contractors and the sub-contractors were part of the same undertakings engaged in the infringement. Therefore, the sub-contractor’s relevant sales value should be attributed to Fungs and Dao in determining the fines. The fact that the contractors had profit-sharing arrangements with the sub-contractors was not relevant.

Author

Stephen Crosswell is a partner in Baker McKenzie's Competition practice in Hong Kong, where he oversees competition matters in Hong Kong, China, Vietnam and Korea. He is consistently recognized as a leading lawyer for competition/antitrust by Chambers Asia. He wrote the Hong Kong chapters of Sweet & Maxwell's Competition Law in China & Hong Kong and the Oxford University Press Global Antitrust Compliance Handbook. Mr. Crosswell regularly speaks at leading antitrust events in Asia. He is also involved in capacity building with regional regulators and antitrust policy work. Prior to joining Baker McKenzie, Mr. Crosswell headed a Magic Circle firm's antitrust and competition practice in Hong Kong and coordinated their overall practice in Asia.