17 February 2019
Phase 1 of On Tat Estate includes (from left) Oi Tat House, Shing Tat House and Chun Tat House. Photo: HKEJ
Phase 1 of On Tat Estate includes (from left) Oi Tat House, Shing Tat House and Chun Tat House. Photo: HKEJ

Watchdog files price-fixing charges against 10 decorators

The Competition Commission said it has taken legal action against 10 construction and engineering companies after they were found to have violated the Competition Ordinance over the renovation of a public housing estate in Kwun Tong, the Hong Kong Economic Journal reports.

In a writ submitted to the Competition Tribunal on Monday, the commission said the companies conspired so they could charge the same prices for providing decoration services for tenants of Phase 1 of On Tat Estate.

The companies were also accused of agreeing among themselves to equally share renovation works for tenants of 2,582 units at Chun Tat House, Shing Tat House and Oi Tat House in the public rental housing estate.

According to their agreement, each company would be allocated four floors in each of the three residential buildings and also share among themselves projects from tenants on other floors, the commission said.

It was the second writ of its kind submitted to the tribunal by the commission since the Competition Ordinance took effect in December 2015.

The commission launched an investigation after several tenants revealed that the companies conspired with one another before the construction of the three houses was completed in June last year.

The companies provided decoration services to 833 units between June and November last year using the price-fixing agreement, according to the writ.

The commission asked the tribunal to slap fines on the companies for violation of the First Conduct Rule of the ordinance, without mentioning any amount.

The rule seeks to prohibit arrangements between market participants (whether they are competitors or not) which prevent, restrict or distort competition in Hong Kong. It prevents competitors colluding on key parameters of competition such as price, output or how they bid.

Competition Commission chairperson Anna Wu Hung-yuk said market sharing and price-fixing are serious anti-competition practices which can lead to reduced consumer choices and exorbitant prices as well as hurt consumers, other businesses and the economy as a whole.

Wu said the case is especially serious as the affected tenants belong to low-income groups in public rental housing.

She called on the public to report to the commission when they see any anti-competition practice.

Commenting on the case, the Housing Authority said it provides tenants of newly built public housing units with a list of decorators for their reference but they are always free to choose others not on the list, adding that it will take proper action following the tribunal’s ruling.

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