Hong Kong: Fight To Stop Bid-Rigging In Hong Kong Recognised Internationally

The much publicised 'Fight Bid-rigging Cartels' campaign of the Hong Kong Competition Commission has recently been named a winner in the category Engaging through results: Successful experience in planning, implementing and monitoring advocacy strategies in the Competition Advocacy Contest organised by the International Competition Network. The network is an informal, virtual network that seeks to facilitate cooperation between competition law authorities globally.

The objective of the Campaign is to advocate and educate the public in the topic of bid-rigging, to eliminate the practice of submitting "dummy" bids to harm and defraud consumers, and to promote fair competition.

The commission's resolve to combat bid-rigging cartels is evident not only by the high standards of the campaign but also by its first ever enforcement action against bid-riggers in the Hong Kong Competition Tribunal.

The facts

In July 2016, the Young Women's Christian Association (the "YWCA") issued a tender for the supply and installation of a new information technology server system. In the first round of tenders, the YWCA only received one bid, but the minimum number of tender required was five. In a subsequent round, the respondents to the enforcement action submitted bids for the tender. The tender applications submitted by the respondents allegedly contained "a high degree of consistency in substance and format", including identical responses, identical misspellings and missing of the same key information. The high degree of consistency caused YWCA to suspect bid-rigging and made a complaint to the Hong Kong Competition Commission. The commission initiated a formal investigation within eight days. During the investigation, the commission discovered that one of the respondents sent its pricing details and tender to the other respondents through email. That explained the high degree of consistency in the tender applications.

The commission alleged that the respondents were involved in anti-competitive arrangements contravening the First Conduct Rule under the Competition Ordinance Cap 619, namely that respondents had colluded to submit "dummy" bids to meet the minimum number of tenders required under the procurement policy of the YWCA and secure the contract.

The commission relies on evidence, including correspondence, WhatsApp messages, statements and interview transcripts, to support the case. One of the respondents allegedly said during his interview with the commission that the submission of "dummy" bids was a common practice in the information technology industry. The commission has exercised its power to bring the enforcement action without issuing a warning notice. It demonstrates the readiness of the commission to enforce where there is serious anti-competitive conduct.

The commission seeks remedies for pecuniary penalties against all the respondents and a declaration that the respondents have contravened the First Conduct Rule.

The maximum penalty for a single contravention of the First Conduct Rule is 10 percent of the company's turnover for each year the contravention occurred, up to a maximum of three years.

According to section 6(1) of the Ordinance Cap 619, the First Conduct Rule means "an undertaking must not make or give effect to an agreement, engage in a concerted practice, or as a member of an association of undertakings, make or give effect to a decision of the association, if the object or effect of the agreement, concerted practice or decision is to prevent, restrict or distort competition in Hong Kong". To put it in simple terms, the First Conduct Rule prohibits agreements which result in concerted practices having the object of harming competition. Key examples of prohibited agreements often seen include bid-rigging practices, price fixing agreements and output agreements.

On 28 March 2017, the Competition Tribunal handed down its first written decision on treatment of confidential information in the Originating Notice of Application filed by the Commission in the Tribunal regarding (1) the prices submitted in the tenders to YWCA; (2) the identities of the individuals employed or formerly employed by the YWCA and the respondents; and (3) the identity of the complainant.

Mr Justice Godfrey Lam granted the confidentiality treatment application on the following grounds. The tender prices are commercial information which is not generally in the public domain. The current and former employees are not parties to the proceedings and disclosure of their identities may cause them unnecessary harm. The identity of the complainant is of little significance to the proceedings and unnecessary disclosure may become a disincentive for potential complainants. The trial of the enforcement action is likely to be heard in May next year.

The decision of the Competition Tribunal to protect the confidentiality will encourage people to come forward to make complaints and give evidence. The commission Chairperson, Ms Anna Wu, said: "Bid-rigging is one of the most blatant and harmful forms of anti-competitive conduct. The commission takes this type of conduct very seriously because of its potential to cause significant harm to consumers and the economy as a whole."

Bid-rigging in construction industry

The problem of bid-rigging in renovation projects for residential buildings has caused much concern in the community as such problem penetrates into daily life. In 2016, the commission looked into renovation and maintenance projects provided by the Urban Renewal Authority and the Housing Society to analyse tender data in response to complaints regarding alleged collusive activities. In May 2016, the commission concluded that there was "no conclusive proof of collusive activities having actually taken place". However, that was before the full commencement of the ordinance. The commission may take a very different view if similar tender data and patterns are detected today.

In September 2016, the District Court sentenced Yau to 35 months imprisonment after he pleaded guilty to offering an advantage to the management agents in order to rig renovation tenders at Ravana Garden and Garden Vista, for which contracts were secured to the value of HK$30 million and HK$17.6 million Yau and members of the bid-rigging cartel allegedly offered HK$45 million in bribes to the management agents of the housing estates. In an interview with the newspaper, Yau warned the public to be aware of bid-rigging practices. Yau revealed that bid-rigging in building repair works was a persistent problem. He said that he was motivated to turn himself in because he felt that the bid-riggers were too greedy in hiking costs of the Garden Vista renovation project to more than HK$200 million, when the project could have been completed at HK$120 million. Yau said that he felt under a duty to admit his wrongdoing in order to raise awareness of the prevalence of bid-rigging practices in Hong Kong.


There is much interest in the outcome of this first enforcement action before the tribunal, and if successful, it will consolidate the position of the commission as an effective regulator in eliminating anti-competitive behaviour. The commission has a lot to do if it is serious about eliminating bid-rigging which appears to be prevalent across sectors.

Fight To Stop Bid-Rigging In Hong Kong Recognised Internationally

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.