News Update on the Competition Commission’s case against the Travel Services Sector Price-Fixing Cartel

This news article provides updates to our news article published on 31 January 2022, where we noted that the Competition Commission had commenced an enforcement action in the Competition Tribunal against five parties, comprising of three hotel operators, a travel services provider and a managing director of the travel services provider, alleging that the respondents were part of a travel services sector price-fixing cartel, and we noted that three of the respondents had elected to cooperate (“Settling Respondents“).

On 15 July 2022, the Tribunal granted orders to dispose of the proceedings between the Commission and the Settling Respondents by consent. The orders were granted based on the joint applications made by the Commission and the Settling Respondents. In the applications, the Settling Respondents admitted liability for contravening the First Conduct Rule of the Competition Ordinance or for being involved in the price-fixing cartel.

The Settling Respondents were: 1) Gray Line Tours of Hong Kong Limited (“Gray Line”); 2) Tak How Investment Limited (“Tak How”), owner and operator of InterContinental Grand Stanford Hong Kong; and 3) Mr. Wu Siu-Ieng, Michael, Managing Director of Gray Line (“Mr. Wu”). The Tribunal ordered Gray Line and Tak How to pay pecuniary penalties of HK$4,177,000 and HK$1,600,000 respectively, which reflected a 25% and 20% discount from their respective levels of recommended pecuniary penalty for their cooperation with the Commission, and ordered both to pay the Commission’s investigation and litigation costs. The Tribunal also ordered that Mr. Wu be disqualified from acting as a director in any company for three years. The enforcement action against the two hotel operators that did not elect to resolve the proceedings by consent continues.

The reduced pecuniary penalties that Gray Line and Tak How were ordered to pay reflect the benefits for undertakings to cooperate with the Commission pursuant to its “Cooperation and Settlement Policy for Undertakings Engaged in Cartel Conduct” (“Cooperation Policy“). The case with the Settling Respondents is significant as it is the first case where the Commission obtained an order from the Tribunal resolving an enforcement action pursuant to the Cooperation Policy.

For further information, the Commission’s guidelines and policy documents can be found here.

12 August 2022
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