A salutary lesson for partners: you are liable for your firm’s anti-competitive practices even if you were not involved in them

By Kareena Teh, Catherine Wong:

In our earlier publication “A sign of things to come: Hong Kong competition enforcement developments and trends”, we reported on the Competition Tribunal (the “Tribunal”)’s imposition of pecuniary penalties totaling HK$3.97 million on 10 contractors who breached the first conduct rule by participating in a market-sharing and price-fixing arrangement in relation to decoration work in a public housing estate. One of the 10 contractors found liable was a firm of partners, Tai Dou Building Contractor (“Tai Dou”), which comprised 4 partners. For unknown reasons, the Competition Commission (“Commission”)’s enforcement action (the “Action”) was against Cheung Yiu Fai Danny (“Mr. Cheung”) and Wong Tung Hoi (“Mr. TH Wong”) (in partnership trading as Tai Dou), not against the firm, Tai Dou, nor against all 4 partners of the firm. The 2 partners named in the Action, Mr. Cheung and Mr. TH Wong, had not been involved in and did not have knowledge of the anti-competitive acts of the firm. They appealed and tried to overturn the Tribunal’s Decision that they were liable but were unsuccessful.

In this publication, we consider the Tribunal’s factual findings, Mr. Cheung and Mr. TH Wong’s arguments against their liability and the Court of Appeal’s reasons for upholding the Tribunal’s decision on liability despite Mr. Cheung and Mr. TH Wong’s lack of involvement in and knowledge of the anti-competitive conduct, and highlight practical takeaways for partners to bear in mind.  READ FULL ARTICLE 

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Note: This material has been prepared for general information purposes only and is not intended to be relied upon as professional advice for any cases. Should you need further information or legal advice, please contact us.