COMPETITION COMMISSION v. W. HING CONSTRUCTION CO LTD AND OTHERS

COMPETITION COMMISSION v. W. HING CONSTRUCTION CO LTD AND OTHERS

The Tribunal adopts a structured four-step methodology: (1) determine Base Amount = Value of Sales related to the contravention * Gravity Percentage (24% applied) * Duration Multiplier (1); (2) adjust for aggravating/mitigating/other factors (including limited reductions for subcontractor/nominal participants); (3) apply statutory cap under s93(3) as a backstop; (4) apply cooperation reduction and consider inability to pay (after cap). Applying that method the Tribunal set the specified penalties for each respondent and ordered costs on civil principles (party and party, equal shares with 20% general reduction), declining to award investigation costs for lack of evidential basis.

Citation
[2020] HKCT 1
Parties
Applicant: Competition Commission; 1st Respondent: W. Hing Construction Company Limited (永興聯合建築有限公司); 2nd Respondent: Sun Spark Construction Limited (裕輝建築有限公司); 3rd Respondent: Lau Chung Yan and Lau Chun Kwok Adam (in partnership trading as Mau Hang Painting & Decoration Co); 4th Respondent: Cheung Yiu Fai Danny and Wong Tung Hoi (in partnership trading as Tai Dou Building Contractor); 5th Respondent: Kam Kee Machine Electrical Iron Works Company Limited (金記機電鐵器工程有限公司); 6th Respondent: Hui Tak Cheong Kanly and Hui Tak On Bryan (in partnership trading as Hip Yick Construction Company); 7th Respondent: Suen Sik Kau (trading as Tai Wah Civil Engineering); 8th Respondent: Poon Wai Woon and Poon Kai Wo Julio (in partnership trading as Wai Sun Iron & Decoration Co); 9th Respondent: Yeung Kwok Yee (trading as Wide Project Engineering & Construction Co); 10th Respondent: Luen Hop Decoration Engineering Co Limited (聯合裝飾工程有限公司)
Court
Competition Tribunal
Jurisdiction
Hong Kong
Judgment Date
29 April 2020
Case Number
CTEA2/2017
Procedural Posture
Competition Enforcement Action / Sanctions Hearing and Judgment (pecuniary Penalties and Costs Determination)
Outcome
Declaration that each of the respondents contravened the first conduct rule; pecuniary penalties imposed and costs orders made as set out
Legal Topics
Pecuniary Penalties, Cartel: Price Fixing and Market Sharing, Statutory Turnover Cap, Costs of Proceedings, Costs of Investigation, Cooperation/leniency, Inability to Pay
Source Language
EN
Competition Law Civil Procedure Administrative Law Pecuniary Penalties Cartel: Price Fixing and Market Sharing Statutory Turnover Cap Costs of Proceedings Costs of Investigation +2 more

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Parties

Competition Commission

Applicant

W. Hing Construction Company Limited (永興聯合建築有限公司)

1st Respondent

Sun Spark Construction Limited (裕輝建築有限公司)

2nd Respondent

Lau Chung Yan and Lau Chun Kwok Adam (in partnership trading as Mau Hang Painting & Decoration Co)

3rd Respondent

Cheung Yiu Fai Danny and Wong Tung Hoi (in partnership trading as Tai Dou Building Contractor)

4th Respondent

Kam Kee Machine Electrical Iron Works Company Limited (金記機電鐵器工程有限公司)

5th Respondent

Hui Tak Cheong Kanly and Hui Tak On Bryan (in partnership trading as Hip Yick Construction Company)

6th Respondent

Suen Sik Kau (trading as Tai Wah Civil Engineering)

7th Respondent

Poon Wai Woon and Poon Kai Wo Julio (in partnership trading as Wai Sun Iron & Decoration Co)

8th Respondent

Yeung Kwok Yee (trading as Wide Project Engineering & Construction Co)

9th Respondent

Luen Hop Decoration Engineering Co Limited (聯合裝飾工程有限公司)

10th Respondent

Procedural Posture

Competition Enforcement Action / Sanctions Hearing and Judgment (pecuniary Penalties and Costs Determination)

Legal Issues

  1. 1 Whether a structured multi-step methodology should be adopted for setting pecuniary penalties under s93 of the Competition Ordinance
  2. 2 How to calculate the Base Amount (Value of Sales, Gravity Percentage, Duration Multiplier)
  3. 3 Application and timing of the statutory cap in s93(3)

Ratio Decidendi

The Tribunal adopts a structured four-step methodology: (1) determine Base Amount = Value of Sales related to the contravention * Gravity Percentage (24% applied) * Duration Multiplier (1); (2) adjust for aggravating/mitigating/other factors (including limited reductions for subcontractor/nominal participants); (3) apply statutory cap under s93(3) as a backstop; (4) apply cooperation reduction and consider inability to pay (after cap). Applying that method the Tribunal set the specified penalties for each respondent and ordered costs on civil principles (party and party, equal shares with 20% general reduction), declining to award investigation costs for lack of evidential basis.

Court Disposition

Declaration that each of the respondents contravened the first conduct rule; pecuniary penalties imposed and costs orders made as set out

Orders

  • Declaration that each of the respondents has contravened the first conduct rule
  • 1st Respondent to pay pecuniary penalty of HKD 670000 to the Government within 28 days