COMPETITION COMMISSION v. NUTANIX HONG KONG LTD AND OTHERS

COMPETITION COMMISSION v. NUTANIX HONG KONG LTD AND OTHERS

The Tribunal accepted the Commission’s application of the W Hing methodology and the agreed figures reached with Nutanix, BT and Innovix as falling within an appropriate range, applied a 17% gravity percentage and duration multiplier of 1, adjusted for leadership and mitigation (including 20% reduction because no contract was awarded), applied statutory cap where required, allowed cooperation discounts where applicable, and ordered the specified pecuniary penalties and costs; Tech21 was penalised without cooperation and ordered a smaller fine and a costs contribution.

Citation
[2020] HKCT 11
Parties
Applicant: Competition Commission; 1st Respondent: Nutanix Hong Kong Limited; 2nd Respondent: BT Hong Kong Limited; 3rd Respondent: SIS International Limited; 4th Respondent: Innovix Distribution Limited (trading as “INNOVIX DISTRIBUTION”); 5th Respondent: Tech21 Systems Limited
Court
Competition Tribunal
Jurisdiction
Hong Kong
Judgment Date
16 December 2020
Case Number
CTEA1/2017
Procedural Posture
Competition Tribunal Enforcement Action Under the Competition Ordinance (cap 619) / Consequential Orders Hearing for Declarations, Pecuniary Penalties and Costs Following Liability Judgment
Outcome
Declarations of contravention against Nutanix (1st), BT (2nd), Innovix (4th) and Tech21 (5th); pecuniary penalties and costs ordered as agreed between the Commission and respondents (subject to taxation where noted); liberty to apply on time and manner of payment.
Legal Topics
Bid‑rigging, Pecuniary Penalty Assessment Under Section 93, Costs Allocation, Consent Settlement Procedure (kam Kwong Procedure)
Source Language
EN
Competition Law Administrative Law Civil Procedure Bid‑rigging Pecuniary Penalty Assessment Under Section 93 Costs Allocation Consent Settlement Procedure (kam Kwong Procedure)

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Parties

Competition Commission

Applicant

Nutanix Hong Kong Limited

1st Respondent

BT Hong Kong Limited

2nd Respondent

SIS International Limited

3rd Respondent

Innovix Distribution Limited (trading as “INNOVIX DISTRIBUTION”)

4th Respondent

Tech21 Systems Limited

5th Respondent

Procedural Posture

Competition Tribunal Enforcement Action Under the Competition Ordinance (cap 619) / Consequential Orders Hearing for Declarations, Pecuniary Penalties and Costs Following Liability Judgment

Legal Issues

  1. 1 Whether agreed pecuniary penalties are appropriate under section 93 of the Ordinance
  2. 2 Application of the Tribunal’s methodology for calculating pecuniary penalties (Base Amount, adjustments, statutory cap, cooperation reduction)
  3. 3 Appropriateness of consent/Kam Kwong procedure and the Tribunal’s restraint in reviewing consensual settlements

Ratio Decidendi

The Tribunal accepted the Commission’s application of the W Hing methodology and the agreed figures reached with Nutanix, BT and Innovix as falling within an appropriate range, applied a 17% gravity percentage and duration multiplier of 1, adjusted for leadership and mitigation (including 20% reduction because no contract was awarded), applied statutory cap where required, allowed cooperation discounts where applicable, and ordered the specified pecuniary penalties and costs; Tech21 was penalised without cooperation and ordered a smaller fine and a costs contribution.

Court Disposition

Declarations of contravention against Nutanix (1st), BT (2nd), Innovix (4th) and Tech21 (5th); pecuniary penalties and costs ordered as agreed between the Commission and respondents (subject to taxation where noted); liberty to apply on time and manner of payment.

Orders

  • Declaration that each of the 1st, 2nd, 4th and 5th respondents has contravened the first conduct rule under section 6 of the Competition Ordinance (Cap 619).
  • The 1st respondent (Nutanix Hong Kong Limited) do pay to the Government a pecuniary penalty in the sum of HK$2,394,404 pursuant to section 93 of the Ordinance within 14 days from the date hereof and provide to the applicant documentary evidence of such payment within 7 days from the date of payment.