Flat decorators busted in price-fixing scheme

Local | Sophie Hui 4 Jul 2019

The Competition Commission has prosecuted six decoration contractors and three men for forming a cartel, violating the competition law.

They allegedly allocated customers and coordinated pricing in relation to renovation services at Phase 1 of On Tai Estate, a public housing estate in Kwun Tong developed by the Hong Kong Housing Authority, where they renovated at least 429 flats.

The six decorators are Fungs E & M Engineering Co, Yee Hing Metal Shop, Accord Construction & Decoration Co, Hing Shing Construction Co, Luen Hop Decoration Engineering Co, and Dao Kee Construction Co.

The watchdog has demanded the Competition Tribunal order the six companies and two individuals - Wong Wai-chuen and Wong Fu-san -to pay pecuniary penalties.

It also asked the tribunal to disqualify Cheung Yun-kam as a director of Luen Hop Decoration. The watchdog also seeks a declaration that the six firms have contravened the First Conduct Rule of the Competition Ordinance.

It also wants a tribunal ruling that the two Wongs were involved in the contravention.

It further asked the tribunal to issue an order to restrain or prohibit these companies and people from entering into or participating in any anti-competitive agreements in respect to any renovation projects under the Housing Authority's Decoration Contractor System.

The case stems from a complaint made by the public in August 2017, after the watchdog filed a market sharing and price-fixing case against 10 construction and engineering companies in relation to flat renovations at nearby On Tat Estate.

"This is the third market sharing and price-fixing case that the commission has filed over the past two years in relation to the provision of renovation services at public housing estates, an indication that such practices have been prevalent in the sector," said the commission's chief executive, Brent Snyder.

"The recent tribunal judgment in a similar case, in which all 10 respondent construction companies were found liable for contravening the ordinance, has sent a clear message that such conduct is a blatant violation of the ordinance, and it is particularly egregious when the people directly targeted are some of Hong Kong's most vulnerable consumers."

As of the end of June, the watchdog had received about 3,700 complaints and inquiries which covered various sectors, including building maintenance and renovation.

The commission said nearly 30 percent of the complaints and inquiries were about alleged cartel conduct, including market sharing and price-fixing.

sophie.hui@singtaonewscorp.com

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