COMPETITION COMMISSION v. NUTANIX HONG KONG LTD AND OTHERS

COMPETITION COMMISSION v. NUTANIX HONG KONG LTD AND OTHERS

Applying criminal standard of proof (beyond reasonable doubt), the Tribunal found beyond reasonable doubt that Nutanix and BT arranged for dummy bids and that Nutanix, BT and Innovix, and Nutanix and Tech‑21 engaged in agreements or concerted practices whose object was to prevent, restrict or distort competition (and met the statutory definition of bid‑rigging); the agreements were not made known to YWCA and the Commission had reasonable cause to believe at commencement that YWCA did not know, so no warning notice was required; conduct of junior employee (Shek) was held not attributable to SiS and claims against SiS dismissed.

Citation
[2019] HKCT 2
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; 5th Respondent: Tech-21 Systems Limited
Court
Competition Tribunal
Jurisdiction
Hong Kong
Judgment Date
17 May 2019
Case Number
CTEA1/2017
Procedural Posture
Competition Enforcement / Judgment (tribunal)
Outcome
Application partially allowed: declarations of contravention upheld against Nutanix Hong Kong Limited, BT Hong Kong Limited, Innovix Distribution Limited and Tech‑21 Systems Limited; application dismissed as against SiS International Limited
Legal Topics
First Conduct Rule, Bid Rigging, Warning Notice, Standard of Proof, Attribution of Employee Conduct, Vertical and Horizontal Agreements
Source Language
EN
Competition Law Public Procurement Law Administrative Law First Conduct Rule Bid Rigging Warning Notice Standard of Proof Attribution of Employee Conduct +1 more

Case Brief

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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

4th Respondent

Tech-21 Systems Limited

5th Respondent

Procedural Posture

Competition Enforcement / Judgment (tribunal)

Legal Issues

  1. 1 Whether respondents contravened the first conduct rule (s6) by object
  2. 2 Whether the arrangements amounted to bid‑rigging and thus serious anti‑competitive conduct under s2(1) and s2(2)
  3. 3 Whether a warning notice under s82 was required before commencing proceedings

Ratio Decidendi

Applying criminal standard of proof (beyond reasonable doubt), the Tribunal found beyond reasonable doubt that Nutanix and BT arranged for dummy bids and that Nutanix, BT and Innovix, and Nutanix and Tech‑21 engaged in agreements or concerted practices whose object was to prevent, restrict or distort competition (and met the statutory definition of bid‑rigging); the agreements were not made known to YWCA and the Commission had reasonable cause to believe at commencement that YWCA did not know, so no warning notice was required; conduct of junior employee (Shek) was held not attributable to SiS and claims against SiS dismissed.

Court Disposition

Application partially allowed: declarations of contravention upheld against Nutanix Hong Kong Limited, BT Hong Kong Limited, Innovix Distribution Limited and Tech‑21 Systems Limited; application dismissed as against SiS International Limited

Orders

  • Declaration that Nutanix Hong Kong Limited, BT Hong Kong Limited, Innovix Distribution Limited and Tech‑21 Systems Limited contravened the first conduct rule (s6) by object in relation to YWCA tender in July 2016
  • Proceedings dismissed as against SiS International Limited (conduct of its employee Shek not attributable to SiS)