Hong Kong’s antitrust watchdog reveals first criminal case related to failure to comply with investigatory powers
Hong Kong’s antitrust watchdog announced its first criminal case related to a failure to comply with its investigatory powers on Thursday, with a female employee of a cleaning company charged with destroying evidence.
The Competition Commission reported the case to police after finding evidence that Jessica Lui Miu-ching, 53, had attempted to delete five documents from computers during an investigation into suspected price-fixing among cleaning service companies on September 23, 2019.
Lui, who claimed to be an office worker with Hong Kong Commercial Cleaning Services Limited (HKC), faces one count of disposal and concealment of documents.
Her case was mentioned at West Kowloon Court on Thursday. Magistrate Tsang Hing-tung postponed the case to October 10 and set her bail at HK$5,000 (US$641).
“This marks the first case in which a person is subject to criminal prosecution for non-compliance with the commission’s investigation powers,” the commission said.
The agency stressed that no one should obstruct it from exercising its investigatory powers, saying: “The commission will remain steadfast in its commitment to performing its functions, investigate possible contraventions of the ordinance and adopt appropriate follow-up actions where contraventions have been identified.”
Under the Competition Ordinance, obstructing a search by the commission, including by destroying, falsifying or concealing documents relevant to an investigation, is a criminal offence and carries a maximum penalty of two years in jail and a HK$1 million fine.
The commission can require any person being investigated to produce documents and appear before the agency to provide relevant information. Its officers can also enter and search relevant premises pursuant to a court order.
The watchdog initiated the investigation into HKC and Man Shun Hong Kong & Kln Cleaning Company Limited and three individuals after receiving complaints claiming they had engaged in price-fixing involving about HK$180 million.
According to a commission press release in 2021, the two companies had exchanged commercially sensitive information about 17 tenders submitted to the Housing Authority to secure cleaning services from May 27, 2016, to August 21, 2018.
It claimed staff members at HKC’s business office were able to access the other company’s commercially sensitive documents, including tender documents for Housing Authority contracts and private estates, via short cuts linking HKC’s computers to the other’s server.
During the execution of a search warrant at HKC’s office, attempts were allegedly made to delete these shortcuts and numerous commercial documents potentially relevant to the investigation.
The commission later found the two companies shared common offices and IT access, with the HKC allowing staff from the other company to operate out of the same premises.
In addition, there were instances where the same person handled already completed financial proposals and tendering documents of both companies, and identical or similar pricing were found in tendering documents without plausible reason.
Price fixing is a serious anti-competitive conduct that contravenes the First Conduct Rule of the Competition Ordinance.
The punishment for contravening the Competition Ordinance for an undertaking includes a pecuniary penalty of up to 10 per cent of the undertaking’s annual Hong Kong turnover per offence for a maximum period of three years.
