Tour agency and hotel to be fined HK$5m for price-fixing

The Competition Commission has proposed fining a tour agency HK$4 million for fixing prices together with hotels and banning a former Travel Industry Council chairman from being its company director for three years.

In accordance to cooperation agreements the commission reached with the parties involved, the watchdog has applied to Competition Tribunal to fine Gray Line HK$4.18 million, and to fine InterContinental Grand Stanford Hong Kong HK$1.6 million. 

The commission also applied to have Gray Line's managing director Michael Wu Siu-ieng, a former Travel Industry Council chairman, disqualified from directorship for three years.

The watchdog said between May 2016 and May 2017, two competing travel services providers, Gray Line and Tink Labs, agreed to fix the prices at which tourist attractions and transportation tickets were sold at hotels belonging to nine hotel groups in Hong Kong, including Harbour Plaza 8 Degrees Limited and Harbour Plaza Hotel Management, Prudential Hotel (BVI) Limited, InterContinental Grand Stanford Hong Kong and 6 other groups.   

The hotel groups and a tour counter operator in one of the hotels acted as facilitators by passing on pricing information between these two competitors and contributed to price-fixing. The arrangement harmed competition and contravened the First Conduct Rule of the Competition Ordinance.  

In February 2021, enforcement actions against the 6 other hotel groups and the tour counter operator were resolved with the Commission issuing and all of them accepting infringement notices for acting as facilitators.   

The commission agreed to enter into cooperation agreements with them which will result in the submission of joint applications to the Competition Tribunal seeking orders to allow the proceedings to be disposed of by consent.  

Rasul Butt, chief executive officer of the Commission, said, "Today's enforcement action concludes the Commission's investigation into 9 large hotel groups, 2 travel services providers and a tour counter operator, that took advantage of consumers seeking to visit some of Hong Kong's most popular tourist attractions."  

The investigation took some time as it involved a large number of parties with varying culpability and willingness to cooperate with the watchdog.  

With the benefits of early cooperation with the commission laid out in this case, "it should send a clear message to all businesses that parties who are engaged in cartel conduct should be quick to seize opportunities to cooperate with the Commission so as to secure lenient treatment," Butt added.