COMPETITION COMMISSION v. GRAY LINE TOURS OF HONG KONG LTD AND OTHERS

CTEA 1/2022 [2023] HKCT 7 IN THE COMPETITION TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COMPETITION TRIBUNAL ENFORCEMENT ACTION NO 1 OF 2022 ________________ BETWEEN COMPETITION COMMISSION Applicant and GRAY LINE TOURS OF HONG KONG LIMITED 1st Respondent HARBOUR PLAZA 8 DEGREES LIMITED 2nd Respondent HARBOUR PLAZA HOTEL MANAGEMENT 3rd Respondent LIMITED PRUDENTIAL HOTEL (BVI) LIMITED 4th Respondent TAK HOW INVESTMENT LIMITED (TRADING 5th Respondent AS INTERCONTINENTAL GRAND STANFORD HONG KONG) WU SIU IENG MICHAEL 6th Respondent ________________ Before: Hon Harris J, President of the Competition Tribunal in Chambers Date of Hearing: 2 September 2022 Date of Decision: 14 June 2023 Date of Reasons for Decision: 26 July 2023 _________________________________ R E A S O N S F O R D E C I S I O N _________________________________ On 14 June 2023 I handed down my Decision in this matter dealing with redaction of certain information in the Statements of Agreed Facts referred to in my judgment. I permitted certain redactions to be made in accordance with the directions explained and ordered in the judgment. Appended to this Reasons for Decision are the Statements of Fact redacted in accordance with those directions. (Jonathan Harris) President of the Competition Tribunal Mr Derek Chan SC and Ms Allison Wong, instructed by Pinsent Masons, for the applicant Mr Tony Ko, instructed by Johnny K K Leung & Co, for the 1st and 6th respondents Mr Timothy Parker, instructed by Norton Rose Fulbright Hong Kong, for the 2nd and 3rd respondents Mr Nigel Francis, instructed by YTL LLP, for the 4th respondent Attendance of Deacons, for the 5th respondent, was excused STATEMENT OF AGREED FACTS (R1 and R6) (Prepared pursuant to Rule 39 of the Competition Tribunal Rules, Cap. 619D (“CTR”) and Paragraph 72 of the Competition Tribunal Practice Direction No. 1 (“CTPD1”)) PART A — INTRODUCTION On 20 January 2022, the Competition Commission (“Commission”) issued proceedings pursuant to sections 91, 92, 94, 96 and 101 of the Competition Ordinance (Cap. 619) (“Ordinance”) before the Competition Tribunal (“Tribunal”) against, amongst others, Gray Line Tours of Hong Kong Limited (“Gray Line”) and Wu Siu Ieng Michael (“Michael Wu”), being the 1st and 6th Respondents in these proceedings respectively. The Commission seeks, as against the 1st Respondent: (1) A declaration under section 94(1) of and paragraph 1(a) of Schedule 3 to the Ordinance that it has contravened the First Conduct Rule under section 6 of the Ordinance; (2) A pecuniary penalty in respect of its contravention of the First Conduct Rule pursuant to section 93(1) of the Ordinance; (3) An order requiring it to pay to the Government of the Hong Kong Special Administrative Region an amount equal to the amount of the costs of and incidental to the Commission’s investigation into their conduct or affairs, reasonably incurred by the Commission in connection with proceedings for the contravention; (4) Costs of these proceedings; and (5) Such further or other relief as the Tribunal may consider appropriate. 3. The Commission seeks, as against the 6th Respondent: (1) A declaration under section 94(1) that he has been involved in the contravention of the First Conduct Rule under section 91 of the Ordinance; and (2) A disqualification order for a period of 3 years from the date of the order to be made herein under section 101 of the Ordinance. 4. Subject to the approval of the Tribunal, the Commission and the 1st and 6th Respondents agree to dispose of these proceedings by way of the summary procedure as provided for in Rule 39 of the CTR and §72 of the CTPD1. The procedure as envisaged by the parties is that sanctioned by the High Court in England and Wales in the case of Re Carecraft Construction Co Ltd [1994] 1 WLR 172 and clarified by the English Court of Appeal in Secretary of State for Trade and Industry v Rogers [1996] 1 WLR 1569, and as adopted in Hong Kong for proceedings under section 214 of the Securities and Futures Ordinance (Cap. 571) and section 168H of the former Companies Ordinance (Cap. 32). Further, the procedure was endorsed by the Honourable Mr. Justice Jonathan Harris in his Reasons for Decision handed down on 17 July 2020 in CTEA 1/2018 as a “readymade blueprint for disposing of proceedings under the Ordinance” (Competition Commission v. Kam Kwong Engineering Company Ltd and Others [2020] HKCT 3, at §17) and by the Honourable Madam Justice Linda Chan in her judgment handed down on 3 November 2020 (Competition Commission v. Quantr Limited and Others [2020] HKCT 10). Additionally, the same procedure was adopted by the Honourable Mr. Justice Godfrey Lam (as he then was) in his Judgment handed down on 16 December 2020 in relation to the penalty proceedings in Competition Commission v. Nutanix Hong Kong Limited and Others [2020] HKCT 11. 5. This Statement of Agreed Facts (“Statement”) is submitted pursuant to Rule 39 of the CTR and §72 of the CTPD1. The Tribunal is asked to make the orders sought in paragraphs 2 to 3 above on the basis of the facts set out in this Statement. 6. For the purpose of resolving these proceedings summarily, by reference to the facts as set out below, the Commission contends and the 1st and 6th Respondents admit that, from 18 May 2016 to 8 May 2017, they have contravened the First Conduct Rule under section 6 of the Ordinance (or had been involved in such contravention, as the case may be) by the 1st Respondent having made or given effect to an agreement to fix the prices of tourist attractions and transportation services in Hong Kong through the facilitation of a number of hotels in Hong Kong (“Subject Arrangement”), as more particularly described in paragraphs 0 to 0 below: 7. The facts as set out in this Statement are agreed by the Commission and the 1st and 6th Respondents. The Statement is filed before the Tribunal to support the joint application by the Commission and the 1st and 6th Respondents for the orders sought in paragraphs 2 to 3 above to be made under Rule 39 of the CTR (“Joint Application”). 8. If the Tribunal for whatever reason is of the view that these proceedings shall not be dealt with by way of the Joint Application, no admission or concession by either the Commission or the 1st and 6th Respondents on liability to a pecuniary penalty (save and except the matters set out in paragraphs 0 to 0 below), shall be referred to or relied upon by either the Commission or the 1st and 6th Respondents at any adjourned or subsequent hearing or in any other proceedings without the prior written consent of both the Commission and the 1st and 6th Respondents. 9. The Commission shall also be at liberty to disclose a redacted version of this Statement to any third party where it considers proper to do so in the interests of the public. PART B – UNDISPUTED FACTS RELEVANT TO LIABILITY B1. The Parties 10. Gray Line was and is at all material times a Hong Kong limited liability company with its registered office address located at Room 501, 5th Floor, Cheong Hing Building, 72 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong, engaged in the provision of travel-related services such as local sightseeing tours, arrangement of hotel accommodation and the sale of, among other things, tickets for tourist attractions and transportation services in Hong Kong. 11. Michael Wu was and is at all material times a shareholder and a director of Gray Line holding the position of Managing Director of Gray Line. 12. Tink Labs Limited (“Tink Labs”) was at all material times a Hong Kong limited liability company with its registered office address located at 1/F, 101 King’s Road, North Point, Hong Kong, which engaged in the provision of, among other things, travel-related services to patrons of licensed hotels in Hong Kong via its flagship smartphone known as “handy” (“Handy Devices”), on which tickets for tourist attractions and local tours were sold at the premises of various hotels in Hong Kong (“Ticketing Function”). 13. At all material times, Gray Line sold, among other things, entrance tickets for tourist attractions and transportation services at tour counters located within the premises of a number of hotels in Hong Kong, including the following hotels: (1) Harbour Plaza 8 Degrees (“HP8D”), situated on 199 Kowloon City Road, Tokwawan, Kowloon, Hong Kong, being a hotel owned by Harbour Plaza 8 Degrees Limited (“HP8DL”) and managed by Harbour Plaza Hotel Management Limited (“HPHML”); (2) InterContinental Grand Stanford Hong Kong (“ICGS”), situated on 70 Mody Road, Tsim Sha Tsui, Kowloon, Hong Kong, being a hotel owned and managed by Tak How Investment Limited (“Tak How”); (3) Prudential Hotel (“Prudential”), situated on 222 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong, being a hotel owned and managed by Prudential Hotel (BVI) Limited (“Prudential BVI”); (4) City Garden Hotel (“City Garden”), situated on 9 City Garden Road, North Point, Hong Kong, being a hotel owned by China Asia Property Limited (“CAPL”); (5) Holiday Inn Golden Mile (“HIGM”), situated on 50 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong, being a hotel owned by Harilela Hotels Limited (“HHL”) and managed by Holiday Inns Crowne Plaza (Hong Kong) Inc. (“HICP”); (6) Hotel Panorama by Rhombus (“Panorama”), situated on 8A Hart Avenue, Tsim Sha Tsui, Kowloon, Hong Kong, being a hotel owned and managed by Hotel Panorama Company Limited (“HPCL”); (7) Marco Polo Hongkong Hotel (“HK Hotel”), situated on 3 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong (a hotel owned by The Hongkong Hotel Limited (“HKH”) and managed by Wharf Hotels Management Limited (‘WHML”)), Marco Polo Gateway (“Gateway”), situated on 13 Canton Road, Tsim Sha Tsui, Kowloon (a hotel owned by The Marco Polo Hotel (Hong Kong) Limited (“MPHHKL”) and managed by WHML), Marco Polo Prince (“Prince Hotel”), situated on 23 Canton Road, Tsim Sha Tsui, Kowloon (a hotel owned by The Prince Hotel Limited (“PHL”) and managed by WHML) (HK Hotel, Gateway and Prince Hotel are collectively referred to in this Factual Summary as “Marco Polo Hotels”); and (8) Royal Plaza Hotel (“Royal Plaza”), situated on 193 Prince Edward Road West, Mongkok, Kowloon, Hong Kong, being a hotel managed by Royal Plaza Hotel Management Limited (“RPZ”). 14. In addition to selling entrance tickets for tourist attractions and transportation services at the tour counters of the hotels referred to in paragraph 0(1) to (8) above, guests from the following hotels could also purchase such tickets from Gray Line at the concierge areas: (1) Royal Park Hotel (“Royal Park”), situated on 8 Pak Hok Ting St, Shatin, being a hotel managed by Royal Park Hotel Management Limited (“RPK”); and (2) Royal View Hotel (“Royal View”), situated on 353 Castle Peak Rd (Ting Kau), Ting Kau, being a hotel managed by Leverson Limited (“Leverson”). 15. The hotels referred to in paragraph 0(1) to (8) above together with Royal Park and Royal View are collectively referred to in this Statement of Agreed Facts as “Hotels”. B2. Sale of Tourist Attractions and Transportation Tickets by Gray Line at the Hotels B2a. HP8D 16. Gray Line has been operating a tour counter for the sale of the tourist attractions and transportation tickets at the hotel premises of HP8D since around 2009. In particular, pursuant to 3 licence agreements dated 2 November 2015, 26 October 2016 and 10 November 2017 respectively entered into between HP8DL and Gray Line, Gray Line was granted a non-exclusive right to operate a tour counter at a section of HP8D’s front tour counter for a monthly licence fee of HK$ 5,000 (payable by Gray Line to HP8DL in advance on a monthly basis on the first day of each month) (plus a monthly licence fee equivalent to 10% of the gross turnover of the tour counter (or HK$4,500, whichever is higher) (payable by Gray Line to HP8DL) monthly within 7 days after the end of each month). B2b. ICGS 17. Gray Line has been operating a tour counter for the sale of the tourist attractions and transportation tickets at the hotel premises of ICGS since around the 2000’s. In particular, pursuant to 3 licence agreements dated 30 December 2013, 4 December 2015 and 28 December 2017 respectively entered into between ICGS and Gray Line, Gray Line was granted a right to operate a tour counter at a designated area at the ground floor lobby of ICGS for a prescribed monthly licence fee ranging from HK$23,000 to HK$35,000 payable in advance on the first day of every calendar month by Gray Line to ICGS. B2c. Prudential 18. Gray Line has been operating a tour counter for the sale of the tourist attractions and transportation tickets at the hotel premises of Prudential since around February 2011. In particular, pursuant to 2 licence agreements dated 22 February 2016 and 17 March 2017 respectively entered into between Prudential BVI and Gray Line, Gray Line was granted an exclusive right to operate a tour desk adjacent to the reception desk on 2/F (the lobby floor) of Prudential for a monthly licence fee of HK$15,000 payable by Gray Line to Prudential BVI. B2d. City Garden 19. Gray Line had been operating a tour counter for the sale of the tourist attractions and transportation tickets at the hotel premises of City Garden since 2008. Pursuant to a licence agreement dated 31 October 2014 entered into between CAPL and Gray Line, Gray Line was permitted to operate a tour desk situated in the lobby of City Garden to provide travel-related services to the guests and patrons of City Garden for a monthly licence fee of HK$26,000 (for the month of May 2016) and HK$20,000 (for the months of June to October 2016) payable by Gray Line to CAPL no later than fifth day of each month. Following the expiry of the said licence agreement on 31 October 2016, Gray Line had, instead of operating any tour counter in the hotel premises of City Garden, switched to selling the tourist attractions and transportation tickets via the concierge staff of City Garden. B2e. HIGM 20. Pursuant to various licensing agreements that were first entered into in the 1990’s, HHL had, on behalf of HIGM, permitted Imperial Tours Limited (“ITL”), a Hong Kong limited liability company, to set up a tour counter in the lobby of HIGM providing service on tour, sightseeing and airline bookings to guests at a monthly fee of HK$12,000 payable by ITL to HIGM on the first day of every calendar month. This right was in turn assigned by ITL to Gray Line pursuant to various licensing agreements that were entered into in 1993. Since then, Gray Line sold tourist attractions and transportation tickets at the premises of HIGM. B2f. Panorama 21. Gray Line had been operating a tour counter for the sale of tourist attractions and transportation tickets at Panorama since around April 2008. In particular, pursuant to a licence agreement dated 26 March 2015 entered into between HPCL and Gray Line, Gray Line was permitted to use a portion of the area on the Ground Floor of the hotel premises of Panorama to sell and provide tour packages, visa services and travel related services (including attraction tickets) for a monthly licence fee of HK$20,000 payable in advance on the first day of each and every calendar month by Gray Line to HPCL. The said licence agreement between HPCL and Gray Line expired on 31 March 2017 and since then, Gray Line no longer operated any counter at the hotel premises of Panorama. B2g. Marco Polo Hotels 22. Gray Line has been operating a tour counter for the sale of the tourist attractions and transportation tickets at the hotel premises of HK Hotel since around 2000. In particular, pursuant to 2 licence agreements dated 23 December 2015 and 28 December 2016 respectively entered into between HKH and Gray Line, Gray Line was permitted to use a counter space at the lobby of HK Hotel to provide travel-related services (i.e. local and immediately neighbouring sightseeing tours, visa services and sales of flight and admission tickets) to the guests of HK Hotel for a monthly licence fee of HK$31,000 payable monthly in advance on the first day of each month by Gray Line to HKH. 23. Gray Line has been operating a tour counter for the sale of the tourist attractions and transportation tickets at the hotel premises of Prince Hotel since around 2000. In particular, pursuant to 2 licence agreements dated 23 December 2015 and 28 December 2016 respectively entered into between PHL and Gray Line, Gray Line was granted a licence to use a counter space at the lobby of Prince Hotel to provide travel-related services (i.e. local and immediately neighbouring sightseeing tours, visa services and sales of flight and admission tickets) to the guests of Prince Hotel for a monthly license fee of HK$10,000 payable in advance on the first day of each and every calendar month by Gray Line to PHL. 24. Pursuant to 2 licence agreements dated 23 December 2015 and 28 December 2016 entered into between MPHHKL and Gray Line, Gray Line was granted a license to use a counter space at the lobby of Gateway to provide travel-related services (i.e. local and immediately neighbouring sightseeing tours, visa services and sales of flight and admission tickets) to the guests of Gateway for a monthly license fee of HK$4,000 from July to December 2016, and HK$2,000 from January to April 2017 payable in advance on the first day of each and every calendar month by Gray Line to MPHHKL. Unlike HK Hotel and Prince Hotel, Gray Line did not station any staff to operate the tour counter at Gateway. Gateway’s concierge staff would refer any hotel guests wishing to purchase travel-related tickets to the Gray Line’s tour desk at Prince Hotel, which was situated right next to Gateway. B2h. Royal Plaza, Royal Park, and Royal View (collectively referred to as “Royal Hotels”) 25. Gray Line has been operating a tour counter for the sale of the tourist attractions and transportation tickets at the hotel premises of Royal Plaza since around 1 November 2014. In particular, pursuant to 2 licence agreements dated 26 September 2014 and 18 October 2016 respectively entered into between RPZ and Gray Line, Gray Line was permitted to use a portion of area on the Ground Floor of Royal Plaza to sell and provide tour packages, visa services and travel-related services to the guests of Royal Plaza for a monthly licence fee of HK$30,000 payable in advance on the first day of each month by Gray Line to RPZ. 26. As for Royal Park and Royal View, while there was no written agreement between these hotels and Gray Line, sightseeing tours operated by and tickets available for purchase from Gray Line could be directly purchased at the concierge of these hotels. In return, Royal Park and Royal View earned a commission on the sales of these tickets (although Gray Line did not directly sell these tickets within the premises of these hotels). B3. Attraction Tickets 27. At all material times, a combination of tickets to the following tourist attractions and transportation services in Hong Kong (collectively, “Tickets”) were sold by both Gray Line and Tink Labs (through the Handy Devices) at the Hotels’ premises: (1) Hong Kong Disneyland; (2) Ocean Park Hong Kong; (3) Peak Tram; (4) Big Bus; (5) Ngong Ping 360 Cable Car; (6) Disney Themed Magical World (formerly known as Hong Kong 3D Museum); (7) Madame Tussauds; and (8) Airport Express. 28. In Annex A to this Statement of Agreed Facts is a table setting out the Tickets available for sale by both Gray Line and Tink Labs in each of the Hotels during the period stated in the second column of the Table which is relevant to the Subject Arrangement. Definitions used in Annex A are adopted in this Statement of Agreed Facts. 29. Gray Line and Tink Labs had, together with the Hotels acting as facilitators, made and given effect to an agreement or had engaged in the concerted practice of fixing and controlling the prices of the Tickets that were being sold by Gray Line and Tink Labs at the premises of the Hotels, in contravention of section 6 of the Ordinance. B4. The Subject Arrangement 30. At all material times, Gray Line and Tink Labs were competing undertakings that sold tourist attractions and transportation tickets in Hong Kong, including the sale of the Tickets in the premises of the Hotels. 31. In March 2016, upon the instructions of Michael Wu, Gray Line’s staff contacted the Hotels (save for HIGM) and ITL complaining that Tink Labs was selling the Tickets at a price which was lower than the one charged by Gray Line, which was the official price published by the relevant tourist attractions and transportation services (“Published Price”). In addition, Gray Line conveyed to the Hotels concerns relating to the potential liability arising from the tours offered by Tink Labs via the Handy Devices and the possibility that the Hotels might receive complaints from guests if there were two different sets of prices of the Tickets within the Hotels’ premises. Gray Line therefore requested the Hotels to ask Tink Labs to remove the Ticketing Function on the Handy Devices. 32. In response to Gray Line’s complaint (which was passed from the Hotels to Tink Labs - in the case of HIGM, the complaint was passed from ITL to HIGM, then from HIGM to Tink Labs) and following a series of communications between Tink Labs, the Hotels, Gray Line, and ITL (but only in relation to HIGM), ITL and each of the Hotels had separately agreed with Gray Line and Tink Labs that: (1) Tink Labs would raise the prices of the Tickets available for sale on the Handy Devices to match the Published Prices; and (2) Gray Line would provide to the Hotels the prices of the Tickets (i.e. the Published Prices) which it expected the Hotels to pass onto Tink Labs for the purpose of facilitating the price matching. 33. Pursuant to and in furtherance of the Subject Arrangement, Gray Line and some of the Hotels had on numerous occasions monitored the prices at which Tink Labs was charging for the Tickets. Where it was discovered that Tink Labs was deviating from the Published Prices, Gray Line and, in some cases, the Hotels would raise this to Tink Labs and ask it to realign its prices with the Published Prices. 34. In the circumstances: (1) The object of the Subject Arrangement was to prevent, restrict, or distort competition between Gray Line and Tink Labs in relation to the sale of the Tickets at the Hotels; (2) The Subject Arrangement constitutes a form of price-fixing between competitors; (3) By engaging in the Subject Arrangement, Gray Line has committed a single and continuous contravention of the First Conduct Rule together with Tink Labs from as early as 18 May 2016 (when Gray Line had agreed to the Subject Arrangement with Tink Labs vis Panorama) up until 8 May 2017 (when Tink Labs had ceased complying with the Subject Arrangement vis all of the Hotels), facilitated by: (a) HP8D between 1 August 2016 and 8 May 2017; (b) ICGS between 7 September 2016 and 8 May 2017; (c) Prudential between 27 May 2016 and 8 May 2017; (d) City Garden between 26 September 2016 and 8 May 2017; (e) HIGM between 29 August 2016 and 8 May 2017; (f) Panorama between 18 May 2016 and 8 May 2017; (g) Macro Polo Hotels between 19 July 2016 and 8 May 2017; and (h) Royal Hotels between 22 June 2016 and 8 May 2017. (4) Such conduct constitutes “serious anti-competitive conduct” within the meaning of section 2(1) of the Ordinance. B5. Subject Arrangement in relation to the Relevant Tickets Sold at HP8D 35. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at HP8D, as facilitated by HP8DL and HPHML, was made and given effect to in accordance with the events set out below: (1) On 12 May 2016, upon the instructions of Michael Wu, Mr A, who was at the material times the Executive Director of Gray Line, sent an email to Mr B, who was at the material times the Front Desk Manager of HP8D, indicating that Tink Labs should not be allowed to provide sales of tourist attractions ticket and sightseeing tours on the Handy Devices should Tink Labs approach HP8D for installing the Handy Devices in its guest rooms. (2) On 27 May 2016, Michael Wu and Mr A met with Mr B, during which Gray Line raised the point about the possible complaints by guests if there were 2 sets of prices for the Tickets. (3) On 30 May 2016, Mr A sent an email to Mr B (which was coped to Michael Wu) stating, among other things, that: (a) Tink Labs was selling the Relevant Tickets Sold at HP8D through the Handy Devices at various prices which were lower than the Published Prices of those tourist attractions and transportation services (see below); HP8D Ticket Published Price (Adult) (HK$) Price per Handy Devices (HK$) Hong Kong Disneyland 539 485 Ocean Park Hong Kong 385 320 Peak Tram (one way) + SK 71 53 Ngong Ping 360 Cable Car 255 212 Big Bus 450 382 Madame Tussaud Hong Kong 255 173 Disney Themed Magical World (formerly known as Hong Kong 3D Museum) 149 90 Airport Express (Tsing Yi Station) 60 42 (b) The fact that Tink Labs offered to sell the Relevant Tickets Sold at HP8D at prices that were below the Published Prices through the Handy Devices would affect the business of the tour counter of Gray Line, which would in turn affect the income of HP8D under the revenue sharing arrangement between Gray Line and HP8DL; and (c) Some of the partner hotels of Gray Line, such as Hotel X and Hotel Y, had successfully asked Tink Labs to remove the Ticketing Function from the Handy Devices. (4) On 21 July 2016, Mr A sent an email to Mr B (which was copied to Michael Wu) stating, among other things, that: (a) Hotels such as Hotel X and Hotel Y had stopped Tink Labs from selling tourist attractions tickets and sightseeing tours from the Handy Devices; (b) Hotels such as the Marco Polo Hotels, Prudential and Panorama had Tink Labs adjust the selling prices of theme park tickets available for sale on the Handy Devices to the Published Prices; and (c) Hotels such as Hotel Z had replaced the Handy Devices with pocket wifis for guests’ use. (5) On 1 August 2016, Ms C, who was at the material times the Hospitality Account Manager of Tink Labs called Mr B informing him that Tink Labs could adjust the prices of the Relevant Tickets Sold at HP8D on the Handy Devices to the Published Prices. On the same day, Mr B emailed Ms C setting out the Published Prices of the Relevant Tickets Sold at HP8D and requesting Tink Labs to adjust the selling price of the Relevant Tickets Sold at HP8D to the Published Prices. Upon Tink Labs matching the prices of the Relevant Tickets Sold at HP8D with the Published Prices on 1 August 2016, Ms C replied to Mr B by email stating that the prices of the Relevant Tickets Sold at HP8D available for sale on the Handy Devices had been updated “as per {his} request”. (6) Pursuant to and in furtherance of the Subject Arrangement: (a) On 29 September 2016, upon noting that Tink Labs had discounted the prices of the Relevant Tickets Sold at HP8D that were sold via the Handy Devices, Mr D, who was at the material times the Senior Manager, Quality Services and Marketing of Gray Line, sent an email to HP8D to complain about the matter. (b) By reply email sent on the same day, Mr B informed Mr D that he had conducted a check of the relevant prices and confirmed that the prices on the Handy Devices had been changed back to the Published Prices. 36. By reason of the matters set out in this Section B5, the fact that Tink Labs had, pursuant to the Subject Arrangement, matched its prices of the Relevant Tickets Sold at HP8D on the Handy Devices with the Published Prices was at all material times made known to Gray Line, Michael Wu and HP8D. 37. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at HP8D, as facilitated by HP8DL and HPHML, commenced on 1 August 2016 and had continued until 8 May 2017 when Tink Labs ceased complying with the same. B6. Subject Arrangement in relation to the Relevant Tickets Sold at Prudential 38. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at Prudential, as facilitated by Prudential BVI, was made and given effect to in accordance with the events set out below: (1) On 12 May 2016, acting upon the instructions of Michael Wu, Mr A emailed Mr E, who was at all material times the General Manager of Prudential, raising Gray Line’s concerns and the potential problems associated with the use of the Ticketing Function of the Handy Devices at Prudential. (2) In response to Gray Line’s complaint, a meeting took place between Gray Line (Michael Wu and Mr A and Mr E and Mr F, who was at all material times the Front Office Manager of Prudential, on 24 May 2016. During the meeting, Michael Wu explained, among other things, Gray Line’s concerns in relation to the price difference in relation to the Tickets Sold at Prudential sold on the Handy Devices. (3) In accordance with what was discussed at the meeting, on 25 May 2016, Prudential passed the Published Prices of the Tickets Sold at Prudential to Tink Labs via email. (4) By 27 May 2016 at the latest, Tink Labs had, pursuant to the Subject Arrangement, matched its prices with the Published Prices. On the same day, Prudential notified Gray Line by email that the prices of the Tickets Sold at Prudential on the Handy Devices had been changed to match with the relevant Published Prices. 39. By reason of the matters set out in this Section B6, the fact that Tink Labs had, pursuant to the Subject Arrangement, matched its prices of the Relevant Tickets Sold at Prudential on the Handy Devices with the Published Prices was at all material times made known to Gray Line, Michael Wu and Prudential. 40. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at Prudential, as facilitated by Prudential BVI, commenced on 27 May 2016 (at the latest) and had continued until 8 May 2017 when Tink Labs ceased complying with the same. B7. Subject Arrangement in relation to the Relevant Tickets Sold at ICGS 41. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at ICGS, as facilitated by Tak How, was made and given effect to in accordance with the events set out below: (1) On 14 March 2016, acting upon the instructions of Michael Wu, Mr A emailed Mr G, who was at the material times the Director of Rooms of ICGS, raising Gray Line’s concerns over the discounted prices charged by Tink Labs for the Relevant Tickets Sold at ICGS. In that email, Gray Line noted that Tink Labs through the Handy Devices was “offering deeply discounted theme park tickets” and that “many different sightseeing tour products” were available for purchase through the Ticketing Function on the Handy Devices. Citing that to allow Tink Labs to offer sales of theme park tickets and sightseeing tours would “cause a lot of damage to both Grayline’s business and {Gray Line’s} relationship with {ICGS}”, Gray Line requested ICGS to ask Tink Labs to stop selling “theme park tickets and sightseeing tours to {ICGS’s} hotel guests’ [sic] using their Handy mobile phone.” (2) In response to Gray Line’s complaint, during the period between March 2016 to September 2016, ICGS had engaged in a series of communications (by phone, emails, and two face-to-face meetings) with Gray Line on the one hand, and Tink Labs on the other hand to try and resolve Gray Line’s complaint. (3) Of relevance to the Commission’s case against Gray Line and Michael Wu: (a) During a meeting held on 16 May 2016, Michael Wu urged the Mr G and Mr H, who was at the material times the Resident Manager of ICGS, to consider asking Tink Labs to, among other things, adjust the selling prices of the Relevant Tickets Sold at ICGS to align with the Published Prices; (b) By an email dated 18 May 2016, ICGS referred to a proposal for Tink Labs to “adjust all ticketing selling prices on Handy to be same as {Gray Line}”; (c) By an email dated 1 June 2016 to Mr H, Mr A set out the price differences of the Relevant Tickets Sold at ICGS sold by Gray Line and Tink Labs via the Handy Devices; (d) On 21 July 2016, Mr A sent an email to Mr G (which was copied to Michael Wu) stating, among other things, that: i. Hotels such as Hotel X and Hotel Y had stopped Tink Labs from selling tourist attractions tickets and sightseeing tours from the Handy Devices; ii. Hotels such as the Marco Polo Hotels, Prudential and Panorama had Tink Labs adjust the selling prices of theme park tickets available for sale on the Handy Devices to the Published Prices; iii. Hotels such as Hotel Z had replaced the Handy Devices with pocket wifis for guests’ use; and (e) On 7 September 2016, Tink Labs changed all the prices of the Relevant Tickets Sold at ICGS to the Published Prices as per the Subject Arrangement. This was confirmed in an email dated 7 September 2016 from Mr I of Tink Labs to Mr G. 42. Following the entering into of the Subject Arrangement, Tink Labs’ pricing of the Tickets Sold at ICGS was monitored by Gray Line. In particular, on 15 March 2017, Gray Line sent an email to ICGS noting that Gray Line were told that “Handy Phone system has been update since last month some hotels Handy Phone ticket selling price back to discounted rate” and requested ICGS to “check it {i.e. Tink Labs} has the ticket price changed in your hotel {i.e. ICGS}”. In response, on the same day, ICGS sent an email to Tink Labs stating that “we {i.e. ICGS} found the discounted prices of various tickets available from the Handy phone in the hotel. Can you have a look and rectify it?”. By an email dated 16 March 2017, Tink Labs replied to ICGS stating that “we {i.e. Tink Labs} will reinstate the higher price today” and Gray Line was subsequently informed by ICGS of Tink Labs’ reinstatement of the Published Prices. 43. By reason of the matters set out in this Section B7, the fact that Tink Labs had, pursuant to the Subject Arrangement, matched its prices of the Relevant Tickets Sold at ICGS on the Handy Devices with the Published Prices was at all material times made known to Gray Line, Michael Wu and ICGS. 44. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at ICGS, as facilitated by Tak How, commenced on 7 September 2016 and had continued until 8 May 2017 when Tink Labs ceased complying with the same. B8. Subject Arrangement in relation to the Relevant Tickets Sold at City Garden 45. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at City Garden, as facilitated by CAPL, was made and given effect to in accordance with the events set out below: (1) On 11 May 2016, upon the instructions from Michael Wu, Mr A emailed a representative of City Garden, raising Gray Line’s concerns and the potential problems associated with the use of the Handy Devices at City Garden. In that email, Gray Line noted that installing the Handy Devices in City Garden and allowing Tink Labs to offer sales of theme park, attractions tickets and sightseeing tours would “cause a lot of damage” to their business relationship and hotel image. Further, Gray Line indicated that Handy Devices were selling the theme park tickets below the Published Prices, which would give rise to complaints from hotel guests. Gray Line, therefore, requested City Garden to instruct Tink Labs to stop selling theme park tickets and sightseeing tours to hotel guests through the Handy Devices. (2) Shortly after the receipt of the email from Gray Line, City Garden spoke to Ms C and received a reply from Tink Labs that they had encountered the same problem in other hotels and what Tink Labs did was to increase its related prices to match exactly with the Published Prices. (3) By an email dated 19 May 2016 from Gray Line to City Garden, Gray Line insisted that the installation of the Handy Devices in City Garden had greatly hurt their business and proposed an urgent meeting to discuss, which eventually took place on 20 May 2016 (which was attended by Michael Wu on behalf of Gray Line). (4) Following the meeting on 20 May 2016, Gray Line (upon the instructions of Michael Wu) sent a follow-up email to City Garden on 30 May 2016 further highlighting the problems with Tink Labs selling theme park tickets and sightseeing tours to hotel guests through the Handy Devices. (5) By an email dated 15 September 2016, Gray Line (upon the instructions of Michael Wu) informed City Garden by email of the actions taken by other hotels in relation to the Handy Devices (including that some of the hotels had successfully asked Tink Labs to remove the Ticketing Function). (6) Following further discussions between City Garden and Tink Labs, Tink Labs agreed to adjust the selling price of the Relevant Tickets Sold at City Garden on the Handy Devices to match the Published Prices. (7) By email dated 21 September 2016, Tink Labs asked City Garden to forward all the Published Prices of the Relevant Tickets Sold at City Garden to it so that it could ask their team to update the prices on the Handy Devices. City Garden then informed Gray Line of the action to be taken by Tink Labs and, in turn, asked Gray Line to send all the pricing to City Garden. (8) On 22 September 2016, Gray Line sent the Published Prices of the Relevant Tickets Sold at City Garden to City Garden, which were, in turn, passed onto Tink Labs on 25 September 2016. (9) By 26 September 2016 at the latest, Tink Labs had in order to give effect to the Subject Arrangement amended the prices of the Relevant Tickets Sold at City Garden that were being sold via the Handy Devices at City Garden to match with the Published Prices. (10) On 31 October 2016, Gray Line stopped renting the tour desk at the Hotel from CAPL and had, instead, switched to selling its theme park and attraction tickets via the concierge staff of City Garden. 46. By reason of the matters set out in this Section B8, the fact that Tink Labs had, pursuant to the Subject Arrangement, matched its prices on the Handy Devices with the Published Prices was at all material times made known to Gray Line, Michael Wu and City Garden. 47. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at City Garden, as facilitated by CAPL, commenced on 26 September 2016 (at the latest) and had continued until 8 May 2017 when Tink Labs ceased complying with the same. B9. Subject Arrangement in relation to the Relevant Tickets Sold at HIGM 48. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at HIGM, as facilitated by ITL, HHL and HICP, was made and given effect to in accordance with the events set out below: (1) On 14 March 2016, upon the instructions of Michael Wu, a representative of Gray Line sent an email to ITL to raise its complaint about the Handy Devices’ Ticketing Function. In the email, Gray Line noted that as a result of Tink Labs’ “deeply discounted theme park tickets”, Gray Line had suffered a “significant drop” in its tour and ticket sales from the hotel counters. Citing its “dissatisfaction on the damaging impact” of Tink Lab’s competition, Gray Line requested ITL to urge HIGM to stop Tink Labs from continuing to sell the Relevant Tickets via the Handy Devices. (2) Upon receipt of Gray Line’s complaint, ITL immediately forwarded the complaint to HIGM for their consideration. (3) Following a series of communications between Gray Line, ITL and HIGM to address Gray Line’s complaint, on or around 6 to 9 July 2016, representatives of HIGM, Gray Line (including Michael Wu) and ITL met and discussed, among other things, the alleged potential confusion caused by the differential pricing of the Relevant Tickets Sold at HIGM sold by Gray Line and Tink Labs. (4) Following the meeting, on 9 July 2016, Gray Line (upon the instructions of Michael Wu) sent an email to ITL: (a) Stressing that it was “necessary to align the pricing to avoid misunderstandings”; (b) Providing a comparison between the differential pricing between Gray Line and Tink Labs in a price comparison table; and (c) Expressly proposing that Tink Labs should price match with Gray Line by adopting the Published Prices. (5) In between 14 July 2016 to 25 July 2016, Gray Line prepared and drafted a letter for ITL’s agreement and approval to officially request HIGM to request Tink Labs to, among other things, price match. On 25 July 2016, Gray Line issued the finalised and approved letter to ITL, which was forwarded to HIGM on 26 July 2016 for its attention. (6) In or around 22 August 2016, HIGM approached Tink Labs to relay the concerns of Gray Line and ITL over the sale of the Relevant Tickets Sold at HIGM on the Handy Devices. (7) Thereafter, following further communications between Gray Line, ITL and HIGM on the one hand, and HIGM and Tink Labs on the other hand, in or around late August 2016, Gray Line and Tink Labs agreed on the Subject Arrangement through the facilitation of ITL, HHL and HICP. In particular, in order to address Gray Line’s complaints, Tink Labs agreed to adjust the selling prices of the Relevant Tickets Sold at HIGM to match the Published Prices. (8) Pursuant to the Subject Arrangement: (a) By email on 26 August 2016, HIGM forwarded the Published Prices of the Relevant Tickets Sold at HIGM to Tink Labs (which were earlier provided from Gray Line to ITL, and then from ITL to HIGM) so as to allow Tink Labs to match their prices with the Published Prices; (b) By 29 August 2016 at the latest, Tink Labs had increased the prices of the Relevant Tickets Sold at HIGM on the Ticketing Function to match with the Published Prices; and (c) By 2 emails dated 29 August 2016 and 1 September 2016 respectively, Tink Labs confirmed with HIGM, among other things, that it had “increased all the mentioned ticket price as per {HIGM’s} request”. 49. Following the entering into of the Subject Arrangement, Tink Labs’ pricing of the Relevant Tickets Sold at HIGM was monitored by Gray Line and HIGM. With regard to Gray Line’s acts of monitoring, on 16 March 2017, Gray Line requested HIGM to check whether Tink Labs had discounted its prices and on the same day, upon discovering that Tink Labs’ prices differed from the Published Prices, HIGM requested Tink Labs to address the differential pricing. On this occasion, HIGM had also explicitly reconfirmed with Tink Labs that it wished for it to price match “as per {their} previous agreement”. 50. By reason of the matters set out in this Section B9, the fact that Tink Labs had, pursuant to the Subject Arrangement, matched its prices of the Relevant Tickets Sold at HIGM on the Handy Devices with the Published Prices was at all material times made known to Gray Line, Michael Wu and HIGM. 51. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at HIGM, as facilitated by ITL, HHL and HICP, commenced on 29 August 2016 (at the latest) and had continued until 8 May 2017 when Tink Labs ceased complying with the same. B10. Subject Arrangement in relation to the Relevant Tickets Sold at Panorama 52. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at Panorama, as facilitated by HPCL, was made and given effect to in accordance with the events set out below: (1) On 14 March 2016, upon the instructions of Michael Wu, an email was sent by Mr A to the General Manager of Panorama, raising Gray Line’s concerns and the potential problems associated with the use of the Handy Devices at Panorama. In that email, Gray Line noted that as a result of Tink Labs’ “deeply discounted theme park tickets”, Gray Line had suffered a “significant drop” in its tour and ticket sales from the hotel counters. Citing its “dissatisfaction on the damaging impact” of Tink Lab’s competition, Gray Line requested Panorama to stop Tink Labs from continuing to sell the Relevant Tickets Sold at Panorama via the Handy Devices. (2) In response, on 16 March 2016, Panorama replied to Gray Line by email stating that it would request Tink Labs to remove the Ticketing Function from the Handy Devices. (3) By 2 emails dated 16 March 2016 and 17 March 2016 respectively, Gray Line informed Panorama that the Ticketing Function could be deleted from the Handy Devices and that one of their rental counter at another hotel had already successfully disabled the Ticketing Function. (4) During the period between 16 March 2016 and 24 March 2016, Panorama referred Gray Line’s complaint to Tink Labs. By an email dated 24 March 2016, Tink Labs proposed to Panorama that they could increase the ticket price to “match with” the Published Prices. On the same day, Panorama emailed Gray Line relaying Tink Lab’s price matching proposal. (5) By an email dated 30 March 2016, Gray Line rejected the price matching proposal from Tink Labs stressing that 2 other hotels had successfully blocked the selling of tickets from the Handy Devices. (6) Following further discussions between Gray Line and Panorama in April and May 2016, Gray Line accepted the price matching proposal from Tink Labs. By an email dated 10 May 2016, Gray Line instructed Panorama to ask Tink Labs to, among other things, adjust the selling price to match with the Published Prices for the Relevant Tickets Sold at Panorama. (7) By an email dated 12 May 2016, Panorama requested Tink Labs to adjust the selling price of the Relevant Tickets Sold at Panorama to match the Published Prices for the same. On 18 May 2016, Panorama sent another email to Tink Labs to follow up on the request. (8) Following Panorama’s request and by 18 May 2016 at the latest, Tink Labs increased the prices of the Relevant Tickets Sold at Panorama available for sale on the Handy Devices, which was recorded in an email dated 18 May 2016 from a representative from Tink Labs to a representative of Panorama. 53. By reason of the matters set out in this Section B10, the fact that Tink Labs had, pursuant to the Subject Arrangement, matched its prices of the Relevant Tickets Sold at Panorama on the Handy Devices with the Published Prices was at all material times made known to Gray Line, Michael Wu and Panorama. 54. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at Panorama, as facilitated by HPCL commenced on 18 May 2016 (at the latest) and had continued until 8 May 2017 when Tink Labs ceased complying with the same. B11. Subject Arrangement in relation to the Relevant Tickets Sold at the Marco Polo Hotels 55. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at the Marco Polo Hotels, as facilitated by HKH, MPHHKL, PHL and WHML, was made and given effect to in accordance with the events set out below: (1) On 14 March 2016, upon the instructions of Michael Wu, an email was sent by Mr A to a representative of the Marco Polo Hotels, raising Gray Line’s concerns and the potential problems associated with the use of the Handy Devices at the Marco Polo Hotels. In the email, Gray Line noted that as a result of Tink Labs’ “deeply discounted theme park tickets”, Gray Line had suffered a “significant drop” in its tour and ticket sales from the hotel counters. Citing that this would damage Gray Line’s relationship with Marco Polo Hotels, Gray Line requested Marco Polo Hotels to stop Tink Labs from selling the Relevant Tickets Sold at Marco Polo Hotels via the Handy Devices. (2) Upon receipt of Gray Line’s email, on 15 March 2016, Marco Polo Hotels sent an email to Tink Labs conveying Gray Line’s complaint and inquiring whether Tink Labs could stop the Ticketing Function on the Handy Devices. (3) Thereafter in around mid-July 2016, following a series of emails and telephone communications from March to July 2016 between Gray Line and the Marco Polo Hotels on the one hand and the Marco Polo Hotels and Tink Labs on the other hand, Gray Line and Tink Labs agreed on the Subject Arrangement through the facilitation of HKH, MPHHKL, PHL and WHML. In particular, in order to address Gray Line’s complaints, Tink Labs agreed to adjust the selling prices of the Relevant Tickets Sold at Marco Polo Hotels on the Ticketing Function to match the Published Prices. (4) By 19 July 2016 at the latest, Tink Labs had, in accordance with the Subject Arrangement, adjusted all of its prices for the Relevant Tickets Sold at Marco Polo Hotels to match the Published Prices. These prices were passed on from Gray Line to the Marco Polo Hotels, and then from the Marco Polo Hotels to Tink Labs. (5) By an email from Gray Line to the Marco Polo Hotels dated 16 March 2017, Gray Line noted that it had recently discovered that Tink Labs had been discounting its ticket prices at Gray Line’s other “partner hotels” and requested the Marco Polo Hotels to check whether the discounts were also being applied on the Ticketing Function on the Handy Devices in the Marco Polo Hotels. (6) Upon verification by Marco Polo Hotels, it was confirmed that Tink Labs was charging discounted prices for tickets to Hong Kong Disneyland and Ocean Park. By an email dated 8 April 2017, Marco Polo Hotels informed Gray Line that they were addressing the matter with Tink Labs. This email was acknowledged by Gray Line on 10 April 2017 in its return email to the Marco Polo Hotels. 56. By reason of the matters set out in this Section B11, the fact that Tink Labs had, pursuant to the Subject Arrangement, matched its prices of the Tickets Sold at Marco Polo Hotels on the Handy Devices with the Published Prices was at all material times made known to Gray Line, Michael Wu and the Marco Polo Hotels. 57. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at the Marco Polo Hotels, as facilitated by HKH, MPHHKL, PHL and WHML commenced on 19 July 2016 (at the latest) and had continued until 8 May 2017 when Tink Labs ceased complying with the same. B12. Subject Arrangement in relation to the Relevant Tickets Sold at the Royal Hotels 58. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at the Royal Hotels, as facilitated by RPZ, RPK and Leverson was made and given effect to in accordance with the events set out below: (1) On 12 May 2016, upon the instructions of Michael Wu, Mr A sent an email to a representative of Royal Plaza, setting out the following complaint: (a) Gray Line was aware that Tink Labs “has been making sales call to hotels” in Hong Kong; (b) “Handy currently offers sales of theme park and attraction tickets, as well as sightseeing tours to be available for purchase directly through Handy’s phone”; (c) All of the theme park tickets that are sold via Gray Line’s hotel tour desk “… follows the published price of each theme park to protect the image of both Grayline and {Royal Plaza}”; and (d) On the basis of “mutual respect”, if Tink Labs approached the Royal Hotels again to advertise the installation of the Handy Devices, they should tell Tink Labs that “they cannot provide sales of theme park tickets and sightseeing tours on the phone”. (2) Upon receiving Gray Line’s complaint, on 12 May 2016: (a) Royal Plaza conducted an internal comparison of the ticket prices that were sold by both Gray Line and Tink Labs whereupon it was discovered by Royal Plaza that Gray Line and Tink Labs both sold tickets to Disneyland and Ocean Park but with Tink Labs selling at a lower price than the Published Price; and (b) As part of Royal Plaza’s ongoing contractual discussions with Tink Labs, Royal Plaza requested that Tink Labs “eliminate” the Ticketing Function “because {they} have found there is a pricing conflict with {their} tour desk.” (3) Following a series of meetings and communications from 12 May 2016 to 7 June 2016 between Gray Line and Royal Plaza on the one hand, and Royal Plaza and Tink Labs on the other hand, it was eventually agreed between Gray Line and Tink Labs, as facilitated by RPZ, RPK and Leverson that Tink Labs would, among other things, increase the prices of the Relevant Tickets Sold at Royal Hotels so that they will be in line with the Published Prices. (4) On 20 June 2016, Tink Labs expressly confirmed by email that “we will take out the walking tour and line up the theme parks ticket price for all 3 properties (Royal Plaza, View and Park) by today.” On the same day, Royal Plaza confirmed to the representatives of Royal View and Royal Park that as per the instructions from the management of Royal Hotels, Tink Labs had been requested to “line up the {terms and condition} for all 3 properties”. (5) By 22 June 2016 at the latest, Tink Labs had, pursuant to the Subject Arrangement, matched the prices of the Relevant Tickets Sold at Royal Hotels on the Handy Devices with the Published Prices. (6) Further in between 22 June 2016 to 28 June 2016, the following was exchanged between Tink Labs and Royal Plaza, on behalf of all three Royal Hotels: (a) On 22 June 2016, Tink Labs confirmed to the staff of Royal Plaza that it had taken out the walking tour functions and “changed the theme park ticket price as well as revised {the terms and conditions}”. Later on the same day, Tink Labs was requested to remove the walking tour function from the English version on the Handy Devices (as it was still being displayed), and was also requested the same to be done for both Royal View and Royal Park; (b) On 27 June 2016, Tink Labs confirmed to the staff of Royal Plaza that the walking tour function no longer existed on the Handy Devices for all three Royal Hotels; and (c) On 28 June 2016, Royal Plaza acknowledged that the walking tour function had been removed. (7) On 21 July 2016, Mr A sent an email to a representative of Royal Plaza (which was copied to Michael Wu) stating, among other things, that: (a) Hotels such as Hotel X and Hotel Y had stopped Tink Labs from selling tourist attractions tickets and sightseeing tours from the Handy Devices; (b) Hotels such as the Marco Polo Hotels, Prudential and Panorama had Tink Labs adjust the selling prices of theme park tickets available for sale on the Handy Devices to the Published Prices; and (c) Hotels such as Hotel Z had replaced the Handy Devices with pocket wifis for guests’ use. Later on the same day, Gray Line was informed of the Subject Arrangement by an email from Royal Plaza. 59. Following the entering into of the Subject Arrangement, Tink Labs’ pricing of the Relevant Tickets Sold at Royal Hotels was monitored by Gray Line and the Royal Hotels. 60. By reason of the matters set out in this Section B12, the fact that Tink Labs had, pursuant to the Subject Arrangement, matched its prices on the Handy Devices with the Published Prices was at all material times made known to Gray Line, Michael Wu and the Royal Hotels. 61. The Subject Arrangement between Gray Line and Tink Labs in relation to the Relevant Tickets Sold at the Royal Hotels, as facilitated by RPZ, RPK and Leverson commenced on 22 June 2016 (at the latest) and had continued until 8 May 2017 when Tink Labs ceased complying with the same. B13. Admission of Liability by Gray Line and Michael Wu 62. By reason of the matters set out herein, Gray Line and Michael Wu admit the following: (1) The object of the Subject Arrangement was to prevent, restrict, or distort competition between Gray Line and Tink Labs in relation to the sale of the Relevant Tickets at the Hotels; (2) The Subject Arrangement constitutes a form of price-fixing between competitors; (3) By engaging in the Subject Arrangement, Gray Line has committed a single and continuous contravention of the First Conduct Rule together with Tink Labs from as early as 18 May 2016 (when Gray Line had agreed to the Subject Arrangement with Tink Labs vis Panorama) up until 8 May 2017 (when Tink Labs had ceased complying with the Subject Arrangement vis all of the Hotels), facilitated by: (a) HP8D between 1 August 2016 and 8 May 2017; (b) ICGS between 7 September 2016 and 8 May 2017; (c) Prudential between 27 May 2016 and 8 May 2017; (d) City Garden between 26 September 2016 and 8 May 2017; (e) HIGM between 29 August 2016 and 8 May 2017; (f) Panorama between 18 May 2016 and 8 May 2017; (g) Macro Polo Hotels between 19 July 2016 and 8 May 2017; and (h) Royal Hotels between 22 June 2016 and 8 May 2017 (“Contravention”). (4) The Subject Arrangement constitutes “serious anti-competitive conduct” within the meaning of s.2(1) of the Ordinance; and (5) The conduct of Michael Wu and Mr A are attributable to Gray Line insofar as the contravention is concerned and hence Gray Line is liable for the Contravention. 63. Furthermore, by reason of the matters set out herein, Michael Wu further admits the following: (1) He was, at all material times, a director of Gray Line for the purpose of sections 2 and 102 of the Ordinance; (2) Gray Line has contravened the First Conduct Rule by having made/given effect to the Subject Arrangement; and (3) He was, at all material times, a person being involved in the Contravention in that he was, directly and knowingly concerned in or a party to the Contravention for the purpose of s. 91 of the Ordinance. In particular: (a) Being the Managing Director of Gray Line, Michael Wu was also the overall person in charge of the daily operations of Gray Line, including the making of operational decisions and developing business strategies for Gray Line; (b) Michael Wu instructed the personnel of Gray Line to send various emails to the Hotels complaining about the selling of the Tickets by Tink Labs at prices lower than the Published Prices; (c) Michael Wu instructed the personnel of Gray Line to follow up with the Hotels on the complaint and was copied in the email communications between Gray Line and each of the Hotels leading up to the Subject Arrangement; (d) Michael Wu attended face-to-face meetings held between Gray Line and the representatives of the Hotels (including those from HP8D, ICGS and Prudential, City Garden and HIGM) leading up to the Subject Arrangement. In particular, in the meeting with the representatives of ICGS on 16 May 2016, Michael Wu proposed to ICGS that Tink Labs should either remove the Ticketing Function from the Handy Devices or adjust the prices of the Tickets Sold at ICGS to the Published Prices; (e) Michael Wu was regularly informed by the personnel of Gray Line of the implementation of the Subject Arrangement and the subsequent monitoring of the same; and (4) By reason of his conduct as particularized in paragraph 63(3) above, Michael Wu is a person involved in the Contravention in that he was, directly and knowingly concerned in or a party to the Contravention for the purpose of section 91 of the Ordinance. Further and in the alternative, Michael Wu had directly contributed to Gray Line’s contravention of the First Conduct Rule, his conduct as a director makes him unfit to be concerned in the management of a company for the purpose of section 102(b) of the Ordinance. PART C – UNDISPUTED FACTS RELEVANT TO CALCULATION OF RECOMMENDED PECUNIARY PENALTY FOR GRAY LINE AND THE INVESTIGATION COSTS OF THE COMMISSION 64. The financial year of Gray Line starts from 1 October and ends on 30 September of a calendar year. 65. The value of sales (“VoS”) of the Tickets by Gray Line at the Hotels which is directly or indirectly related to the Contravention as described in this Statement of Agreed Facts during the period between 1 March 2016 to 31 May 2017 for the purpose of calculating the pecuniary penalty under section 93 of the Ordinance are set out as follows: Hotel VoS (HK$) HP8D $899,204 ICGS $1,790,497 Prudential $767,501 City Garden $339,087 HIGM $4,454,653 Panorama $420,202 HK Hotel $1,409,873 Gateway $290,232 Prince Hotel $748,567 Royal Plaza $4,493,527 Royal View $2,810 Royal Park $206,477 TOTAL $15,822,630 66. According to the definition of “turnover” under section 2 of the Competition (Turnover) Regulation (Cap. 619C), the turnover of Gray Line for each of its financial years ended 30 September 2016 and 30 September 2017 were HK$163,771,580 and HK$188,276,541 respectively. 67. As for the Commission’s costs of and incidental to its investigation into this matter, the Commission has incurred such costs in the sum of HK$914,179 (see Annex B), HK$76,000 of which represents the 1st Respondent’s share of such investigation costs. PART D – UNDISPUTED FACTS RELEVANT TO THE DETERMINATION OF A DIRECTOR DISQUALIFICATION ORDER AGAINST MICHAEL WU 68. As at the date of this Statement, Michael Wu is 63 years old. He has been awarded the Bronze Bauhinia Star and is the recipient of the Medal of Honour and is a Justice of the Peace. In additional to Gray Line, Michael Wu is also a director of the following companies: (1) Gray Line Investment of Hong Kong Limited; (2) Gray Line Marketing Services Limited; (3) Gray Line Services Limited; (4) The Hong Kong Gray Line Holdings Co. Limited; (5) Hong Kong Taxi Service Limited; and (6) Tourism Industry Service Limited. 69. Gray Line has 5 shareholders and their respective shareholdings are as follows: (1) WU Kuok Ieng (24,500/70,000); (2) WU Siu Ieng Michael (14,000/70,000); (3) WU Ronald Keng Hou (10,500/70,000); (4) WU Yuen Chi Gigi (10,500/70,000); and (5) WU Emily Yuen Lum (10,500/70,000). 70. A director disqualification order against Michael Wu will not cause Michael Wu significant financial hardship. Dated this 29th day of April 2022. _________________________________ __________________________________ PINSENT MASONS Solicitors for the Applicant JOHNNY KK LEUNG & CO Solicitors for the 1st and 6th Respondents Annex A Relevant Tickets available for sale by Gray Line and Tink Labs in the Hotels Hotel Period Tickets HP8D 1 August 2016 and 8 May 2017 Hong Kong Disneyland Ocean Park Hong Kong Peak Tram Ngong Ping 360 Cable Car Big Bus Madame Tussauds Hong Kong Disney Themed Magical World (formerly known as Hong Kong 3D Museum) Airport Express (collectively, “Relevant Tickets Sold at HP8D”) Prudential 27 May 2016 and 8 May 2017 Hong Kong Disneyland Ocean Park Hong Kong Peak Tram (Peak Tram Combo Tour) Ngong Ping 360 Cable Car Big Bus Madame Tussauds Hong Kong Hong Kong 3D Museum Airport Express (collectively, “Relevant Tickets Sold at Prudential”) ICGS 7 September 2016 and 8 May 2017 Hong Kong Disneyland Ocean Park Hong Kong Peak Tram Ngong Ping 360 Cable Car Big Bus Madame Tussauds Hong Kong Disney Themed Magical World (formerly known as Hong Kong 3D Museum) Airport Express (collectively, “Relevant Tickets Sold at ICGS”) City Garden 26 September 2016 and 8 May 2017 Hong Kong Disneyland Ocean Park Hong Kong Peak Tram Ngong Ping 360 Cable Car Madame Tussauds Hong Kong Airport Express Trick Eyes 3D (collectively, “Relevant Tickets Sold at City Garden”) HIGM 29 August 2016 and 8 May 2017 Hong Kong Disneyland Ocean Park Hong Kong Peak Tram Ngong Ping 360 Cable Car Big Bus Madame Tussauds Hong Kong Disney Themed Magical World (formerly known as Hong Kong 3D Museum) Airport Express (collectively, “Relevant Tickets Sold at HIGM”) Panorama 18 May 2016 and 8 May 2017 Hong Kong Disneyland Ocean Park Hong Kong (collectively, “Relevant Tickets Sold at Panorama”) Marco Polo Hotels 19 July 2016 and 8 May 2017 Hong Kong Disneyland Ocean Park Hong Kong Peak Tram Big Bus Madame Tussauds Hong Kong Airport Express (collectively, “Relevant Tickets Sold at Marco Polo Hotels”) Royal Hotels 22 June 2016 and 8 May 2017 Hong Kong Disneyland Ocean Park Hong Kong (collectively, “Relevant Tickets Sold at Royal Hotels”) Annex B Breakdown of the Commission’s costs of and incidental to its investigation into this matter Item Heads of Investigation Costs Claimed Quantity Amount (HK$) 1 Costs related to the execution of warrants issued under s. 48 of the Competition Ordinance (Cap. 619) (“CO”), from 8 January 2018 to 9 January 2018, consisting of the following: 6 warrants 206,698 External digital forensic services 206,493 Local subsistence allowance, travelling and other charges 205 3 External audio recording and transcription services regarding interviews conducted during the investigaton 5 interviews 31,875 4 External translation services regarding translation of interview transcripts and other Chinese language documents, for use by Competition Commission staff, and external Counsel 3 transcripts 105,612 5 External legal services regarding legal advice 124 hours 568,439 6 Miscellaneous: charges for company searches and business registration searches 70 searches 1,555 Total: 914,179 STATEMENT OF AGREED FACTS (R5) (Prepared pursuant to Rule 39 of the Competition Tribunal Rules, Cap. 619D (“CTR”) and Paragraph 72 of the Competition Tribunal Practice Direction No. 1 (“CTPD1”)) PART A — INTRODUCTION 1. On 20 January 2022, the Competition Commission (“Commission”) issued proceedings pursuant to sections 91, 92, 94, 96 and 101 of the Competition Ordinance (Cap. 619) (“Ordinance”) before the Competition Tribunal (“Tribunal”) against, amongst others, Tak How Investment Limited (“Tak How”) (trading as InterContinental Grand Stanford Hong Kong), being the 5th Respondent in these proceedings respectively. 2. The Commission seeks, as against the 5th Respondent: (1) A declaration under section 94(1) of and paragraph 1(a) of Schedule 3 of the Ordinance that it has contravened the First Conduct Rule under section 6 of the Ordinance; (2) A pecuniary penalty in respect of their contravention of the First Conduct Rule pursuant to section 93(1) of the Ordinance; (3) An order requiring it to pay to the Government of the Hong Kong Special Administrative Region an amount equal to the amount of the costs of and incidental to the Commission’s investigation into their conduct or affairs, reasonably incurred by the Commission in connection with proceedings for the contravention; (4) Costs of these proceedings; and (5) Such further or other relief as the Tribunal may consider appropriate. 3. Subject to the approval of the Tribunal, the Commission and the 5th Respondent agree to dispose of these proceedings by way of the summary procedure as provided for in Rule 39 of the CTR and §72 of the CTPD1. The procedure as envisaged by the parties is that sanctioned by the High Court in England and Wales in the case of Re Carecraft Construction Co Ltd [1994] 1 WLR 172 and clarified by the English Court of Appeal in Secretary of State for Trade and Industry v Rogers [1996] 1 WLR 1569, and as adopted in Hong Kong for proceedings under section 214 of the Securities and Futures Ordinance (Cap. 571) and section 168H of the former Companies Ordinance (Cap. 32). Further, the procedure was endorsed by the Honourable Mr. Justice Jonathan Harris in his Reasons for Decision handed down on 17 July 2020 in CTEA 1/2018 as a “readymade blueprint for disposing of proceedings under the Ordinance” (Competition Commission v. Kam Kwong Engineering Company Ltd and Others [2020] HKCT 3, at §17) and by the Honourable Madam Justice Linda Chan in her judgment handed down on 3 November 2020 (Competition Commission v. Quantr Limited and Others [2020] HKCT 10). Additionally, the same procedure was adopted by the Honourable Mr. Justice Godfrey Lam (as he then was) in his Judgment handed down on 16 December 2020 in relation to the penalty proceedings in Competition Commission v. Nutanix Hong Kong Limited and Others [2020] HKCT 11. 4. This Statement of Agreed Facts (“Statement”) is submitted pursuant to Rule 39 of the CTR and §72 of the CTPD1. The Tribunal is asked to make the orders in paragraph 2 above sought on the basis of the facts set out in this Statement. 5. For the purpose of resolving these proceedings summarily, by reference to the facts as set out below, the Commission contends and the 5th Respondent admits that, from 7 September 2016 to 8 May 2017, it has contravened the First Conduct Rule under section 6 of the Ordinance by facilitating an agreement or concerted practice of fixing and controlling the prices of various tourist attractions and transportation tickets in Hong Kong by Gray Line Tours of Hong Kong Limited (“Gray Line”) and Tink Labs Limited (“Tink Labs”) (as defined in Part B1 below) (“Subject Arrangement”), as more particularly described in paragraphs 0 to 0 below: 6. The facts as set out in this Statement are agreed by the Commission and the 5th Respondent. The Statement is filed before the Tribunal to support the joint application by the Commission and the 5th Respondent for the orders sought in paragraph 0 above to be made under Rule 39 of the CTR (“Joint Application”). 7. If the Tribunal for whatever reason is of the view that these proceedings shall not be dealt with by way of the Joint Application, no admission or concession by either the Commission or the 5th Respondent on liability to a pecuniary penalty (save and except the matters set out in paragraphs 25 to 30 below), shall be referred to or relied upon by either the Commission or the 5th Respondent at any adjourned or subsequent hearing or in any other proceedings without the prior written consent of both the Commission and the 5th Respondent. 8. The Commission shall also be at liberty to disclose a redacted version of this Statement to any third party where it considers proper to do so in the interests of the public. PART B – UNDISPUTED FACTS RELEVANT TO LIABILITY B1. The Parties 9. Gray Line was and is at all material times a Hong Kong limited liability company with its registered office address located at Room 501, 5th Floor, Cheong Hing Building, 72 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong, which engages in the provision of travel-related services such as local sightseeing tours, arrangement of hotel accommodation and the sale of, among other things, tickets for tourist attractions and transportation services in Hong Kong. 10. Tink Labs Limited (“Tink Labs”) was at all material times a Hong Kong limited liability company with its registered office address located at 1/F, 101 King’s Road, North Point, Hong Kong, which engaged in the provision of, among other things, travel-related services to patrons of licensed hotels in Hong Kong via its flagship smartphone known as “handy” (“Handy Devices”), on which tickets for tourist attractions and local tours were sold at the premises of various hotels in Hong Kong (“Ticketing Function”). 11. At all material times, Gray Line sold, among other things, entrance tickets for tourist attractions and transportation services at tour counters located within the premises of a number of hotels in Hong Kong, including InterContinental Grand Stanford Hong Kong (“ICGS”), situated on 70 Mody Road, Tsim Sha Tsui, Kowloon, Hong Kong, being a hotel owned and managed by Tak How. B2. Sale of Tourist Attractions and Transportation Tickets by Gray Line at ICGS 12. Gray Line has been operating a tour counter for the sale of the tourist attractions and transportation tickets at the hotel premises of ICGS since around the 2000’s. In particular, pursuant to 3 licence agreements dated 30 December 2013, 4 December 2015 and 28 December 2017 respectively entered into between ICGS and Gray Line, Gray Line was granted a right to operate a tour counter at a designated area at the ground floor lobby of ICGS for a prescribed monthly licence fee ranging from HK$23,000 to HK$35,000 payable in advance on the first day of every calendar month by Gray Line to ICGS. B3. Attraction Tickets 13. During the period between 7 September 2016 and 8 May 2017, entrance tickets to the following tourist attractions and transportation services in Hong Kong (collectively, “Relevant Tickets Sold at ICGS”) were sold by both Gray Line and Tink Labs (through the Handy Devices) at the premises of ICGS: (1) Hong Kong Disneyland; (2) Ocean Park Hong Kong; (3) Peak Tram (Peak Tram Combo Tour); (4) Ngong Ping 360 Cable Car; (5) Big Bus; (6) Madame Tussauds; (7) Hong Kong 3D Museum; and (8) Airport Express. 14. Gray Line and Tink Labs had, together with Tak How acting as a facilitator, made and given effect to an agreement or had engaged in the concerted practice of fixing and controlling the prices of the Relevant Tickets Sold at ICGS by Gray Line and Tink Labs at the premises of ICGS, in contravention of section 6 of the Ordinance. B4. The Subject Arrangement 15. At all material times, Gray Line and Tink Labs were competing undertakings that sold tourist attractions and transportation tickets in Hong Kong, including the sale of the Relevant Tickets Sold at ICGS. 16. In March 2016, upon the instructions of Mr. Wu Siu Ieng Michael (“Michael Wu”), who is, and was at all material times a shareholder and a director of Gray Line holding the position of Managing Director of Gray Line, Gray Line’s staff contacted ICGS complaining that Tink Labs was selling the Relevant Tickets Sold at ICGS at a price which was lower than the one charged by Gray Line - which was the official price published by the relevant tourist attractions and transportation services (“Published Price”). In addition, Gray Line conveyed to ICGS concerns relating to the potential liability arising from the tours offered by Tink Labs via the Handy Devices and the possibility that ICGS might receive complaints from guests if there were two different sets of prices of the Relevant Tickets Sold at ICGS within the hotel’s premises. Gray Line therefore asked ICGS to ask Tink Labs to remove the Ticketing Function on the Handy Devices. 17. In response to Gray Line’s complaint which was passed from ICGS to Tink Labs and following a series of communications between Tink Labs, ICGS and Gray Line, ICGS had separately agreed with Gray Line and Tink Labs that: (1) Tink Labs would raise the prices of the Relevant Tickets Sold at ICGS to match with the Published Prices; and (2) Gray Line would provide to ICGS the prices of the Relevant Tickets Sold at ICGS (i.e. the Published Prices) which it expected ICGS to pass onto Tink Labs for the purpose of facilitating the price matching. 18. In the circumstances: (1) The object of the Subject Arrangement was to prevent, restrict, or distort competition between Gray Line and Tink Labs in relation to the sale of the Relevant Tickets Sold at ICGS; (2) The Subject Arrangement constitutes a form of price-fixing between competitors; and (3) Such conduct constitutes “serious anti-competitive conduct” within the meaning of section 2(1) of the Ordinance. B5. Relevant Facts 19. The Subject Arrangement between Gray Line and Tink Labs, as facilitated by Tak How, was made and given effect to in accordance with the events set out below: (1) On 14 March 2016, acting upon the instructions of Michael Wu, Mr A, who was the Executive Director of Gray Line, emailed Mr G, who was at the material times the Director of Rooms of ICGS raising Gray Line’s concerns. In that email, Gray Line noted that Tink Labs through the Handy Devices was “offering deeply discounted theme park tickets” and that “many different sightseeing tour products” were available for purchase through the Ticketing Function on the Handy Devices. Citing that to allow Tink Labs to offer sales of theme park tickets and sightseeing tours would “cause a lot of damage to both Grayline’s business and {Gray Line’s} relationship with {ICGS}”, Gray Line requested ICGS to ask Tink Labs to stop selling “theme park tickets and sightseeing tours to {ICGS’s} hotel guests’ [sic] using their Handy mobile phone.” (2) In response to Gray Line’s complaint, during the period between March 2016 to September 2016, ICGS had engaged in a series of communications (by phone, emails, and two face-to-face meetings) with Gray Line on the one hand, and Tink Labs on the other hand to try and resolve Gray Line’s complaint. (3) Of relevance to the Commission’s case against Tak How: (a) During a meeting held on 16 May 2016, Michael Wu urged Mr G and Mr H, who was at the material times the Resident Manager of ICGS, to consider asking Tink Labs to, among other things, adjust the selling prices of the Relevant Tickets Sold at ICGS to align with the Published Prices; (b) By an email dated 18 May 2016, ICGS referred to a proposal for Tink Labs to “adjust all ticketing selling prices on Handy to be same as {Gray Line}”; (c) By an email dated 1 June 2016 to Mr H, Mr A set out the price differences of the Relevant Tickets Sold at ICGS sold by Gray Line and Tink Labs via the Handy Devices: ICGS Ticket Published Price (Adult) (HK$) Price per Handy Devices (HK$) Hong Kong Disneyland 539 485 Ocean Park Hong Kong 385 320 Peak Tram (one way) + SK 71 53 Ngong Ping 360 Cable Car 255 212 Big Bus 450 382 Madame Tussaud Hong Kong 255 173 Disney Themed Magical World (formerly known as Hong Kong 3D Museum) 149 90 Airport Express (Tsing Yi Station) 60 42 (d) On 21 July 2016, Mr A sent an email to Mr G (which was copied to Michael Wu) stating, among other things, that: i. Hotels such as Hotel X and Hotel Y had stopped Tink Labs from selling tourist attractions tickets and sightseeing tours from the Handy Devices. ii. Hotels such as Marco Polo Group (HK Hotel, Gateway and Prince Hotel), Prudential and Panorama had Tink Labs adjusted the selling prices of theme park tickets available for sale on the Handy Devices to the Published Prices. iii. Hotels such as Hotel Z had replaced the Handy Devices with pocket wifis for guests’ use; and (e) On 7 September 2016, Tink Labs changed all the prices of the Relevant Tickets Sold at ICGS to the Published Prices as per the Subject Arrangement. This was confirmed in an email dated 7 September 2016 from Mr I of Tink Labs to Mr G. 20. Following the entering into of the Subject Arrangement, Tink Labs’ pricing of the Relevant Tickets Sold at ICGS was monitored by Gray Line. In particular, on 15 March 2017, Gray Line sent an email to ICGS noting that it had “found the discounted prices of various tickets available from the Handy phone in {ICGS}” and requested ICGS to “have a look and rectify it”. In response, on the same day, ICGS sent an email to Tink Labs stating that “we {i.e. ICGS} found the discounted prices of various tickets available from the Handy phone in the hotel. Can you have a look and rectify it?”. By an email dated 16 March 2017, Tink Labs replied to ICGS stating that “we {i.e. Tink Labs} will reinstate the higher price today” and Gray Line was subsequently informed by ICGS of Tink Labs’ reinstatement of the Published Prices. 21. The conduct of Mr G and Mr H of ICGS as referred to above is attributable to Tak How, which was at all material times the owner and manager of ICGS, for the purpose of the Subject Arrangement. 22. The fact that Tink Labs had, pursuant to the Subject Arrangement, matched its prices of the Relevant Tickets Sold at ICGS on the Handy Devices with the Published Prices was at all material times made known to Gray Line, Michael Wu and ICGS. 23. The Subject Arrangement between Gray Line and Tink Labs, as facilitated by Tak How, commenced on 7 September 2016 and had continued until 8 May 2017 when Tink Labs ceased complying with the same. B6. Admission of Liability by Tak How 24. By reason of the matters set out herein, Tak How admits the following: (1) The object of the Subject Arrangement was to prevent, restrict, or distort competition between Gray Line and Tink Labs in relation to the sale of the Relevant Tickets Sold at ICGS; (2) The reaching and implementation of the Subject Arrangement was facilitated by Tak How in the manner described in paragraphs 0 and 0 above; (3) The Subject Arrangement constitutes a form of price-fixing between competitors; (4) Such conduct constitutes “serious anti-competitive conduct” within the meaning of section 2(1) of the Ordinance; and (5) The conduct of Mr G and Mr H are attributable to Tak How insofar as the Subject Arrangement is concerned and hence Tak How is liable for the contravention. PART C – UNDISPUTED FACTS RELEVANT TO CALCULATION OF RECOMMENDED PECUNIARY PENALTY FOR TAK HOW AND THE INVESTIGATION COSTS OF THE COMMISSION 25. The financial year of Tak How starts from 1 January and ends on 31 December of a calendar year. 26. During the period between 7 September 2016 and 8 May 2017, ICGS/Tak How received a total sum of HK$232,000 from Gray Line, being the rental for the counter operated by Gray Line at the premises of ICGS. 27. Apart from the amount of HK$232,000, ICGS/Tak How did not generate any value of sales of the Relevant Tickets Sold at ICGS. 28. During the period between 1 March 2016 and 31 May 2017, at least HK$2,196,990 worth of Relevant Tickets Sold at ICGS were sold by Gray Line and Tink Labs at the premises of ICGS. 29. According to the definition of “turnover” under section 2 of the Competition (Turnover) Regulation (Cap. 619C), the turnover of Tak How for each of their financial years ended 31 December 2016 and 31 December 2017 are HK$472,888,111 and HK$469,393,618 respectively. 30. As for the Commission’s costs of and incidental to its investigation into this matter, the Commission has incurred such costs in the sum of HK$914,179 (see Annex A), HK$76,000 of which represents the 5th Respondent’s share of such investigation costs. Dated this 29th day of April 2022. _________________________________ __________________________________ PINSENT MASONS Solicitors for the Applicant DEACONS Solicitors for the 5th Respondent Annex A Breakdown of the Commission’s costs of and incidental to its investigation into this matter Item Heads of Investigation Costs Claimed Quantity Amount (HK$) 1 Costs related to the execution of warrants issued under s. 48 of the Competition Ordinance (Cap. 619) (“CO”), from 8 January 2018 to 9 January 2018, consisting of the following: 6 warrants 206,698 External digital forensic services 206,493 Local subsistence allowance, travelling and other charges 205 3 External audio recording and transcription services regarding interviews conducted during the investigaton 5 interviews 31,875 4 External translation services regarding translation of interview transcripts and other Chinese language documents, for use by Competition Commission staff, and external Counsel 3 transcripts 105,612 5 External legal services regarding legal advice 124 hours 568,439 6 Miscellaneous: charges for company searches and business registration searches 70 searches 1,555 Total: 914,179