COMPETITION COMMISSION v. KAM KWONG ENGINEERING COMPANY LTD AND OTHERS

COMPETITION COMMISSION v. KAM KWONG ENGINEERING COMPANY LTD AND OTHERS

The Tribunal rejected a subcontractor one‑third discount and a 25% uplift absent evidence of pervasive industry practice, endorsed the four-step penalty methodology, applied a 12% cooperation reduction to the 2nd respondent (more than the Commission’s 10% but less than the respondent’s request), accepted a specific undertaking from the 2nd respondent in lieu of a permanent injunction, and imposed a three‑year director disqualification on the 4th respondent under sections 101–103.

Citation
[2022] HKCT 1
Parties
Applicant: Competition Commission; 1st Respondent: KAM KWONG ENGINEERING COMPANY LTD; 2nd Respondent: GOLDFIELD N&W CONSTRUCTION COMPANY LTD; 3rd Respondent: PACIFIC VIEW ENGINEERING LTD; 4th Respondent: CHAN KAM SHUI; 5th Respondent: LAM PO WONG
Court
Competition Tribunal
Jurisdiction
Hong Kong
Judgment Date
22 July 2022
Case Number
CTEA1/2018
Procedural Posture
Competition Tribunal Enforcement Action / Penalty Determination (post Contravention Decision)
Outcome
Penalties and ancillary orders imposed with adjustments: no 25% uplift; 12% cooperation reduction for 2nd respondent; undertaking accepted from 2nd respondent; 3-year director disqualification for 4th respondent; costs orders as agreed in Consent Summonses.
Legal Topics
Penalties, Director Disqualification, Injunctions, Cooperation Discounts, Evidentiary Basis for Industry Practice
Source Language
EN
Competition Law Regulatory Enforcement Company/director Disqualification Penalties Director Disqualification Injunctions Cooperation Discounts Evidentiary Basis for Industry Practice

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Parties

Competition Commission

Applicant

KAM KWONG ENGINEERING COMPANY LTD

1st Respondent

GOLDFIELD N&W CONSTRUCTION COMPANY LTD

2nd Respondent

PACIFIC VIEW ENGINEERING LTD

3rd Respondent

CHAN KAM SHUI

4th Respondent

LAM PO WONG

5th Respondent

Procedural Posture

Competition Tribunal Enforcement Action / Penalty Determination (post Contravention Decision)

Legal Issues

  1. 1 Whether a discount should be given because a respondent did not directly participate (sub-contractor discount)
  2. 2 Whether an uplift for wider industry practice is justified absent direct evidence of pervasiveness
  3. 3 Appropriate calculation methodology for pecuniary penalties under section 93 of the Competition Ordinance

Ratio Decidendi

The Tribunal rejected a subcontractor one‑third discount and a 25% uplift absent evidence of pervasive industry practice, endorsed the four-step penalty methodology, applied a 12% cooperation reduction to the 2nd respondent (more than the Commission’s 10% but less than the respondent’s request), accepted a specific undertaking from the 2nd respondent in lieu of a permanent injunction, and imposed a three‑year director disqualification on the 4th respondent under sections 101–103.

Court Disposition

Penalties and ancillary orders imposed with adjustments: no 25% uplift; 12% cooperation reduction for 2nd respondent; undertaking accepted from 2nd respondent; 3-year director disqualification for 4th respondent; costs orders as agreed in Consent Summonses.

Orders

  • 1st Respondent to pay pecuniary penalty of HK$398,000 within 28 days
  • 2nd Respondent to pay pecuniary penalty of HK$1,687,000 within 28 days