The first move: Hong Kong Competition Commission enforcing non-compliance with investigation powers

Deletion during dawn raid

The individual had attempted to delete documents and information relevant to the HKCC’s investigation from computers when the HKCC executed search warrants at the offices of the companies involved.  He was charged with one count of disposal and concealment of documents.  The investigation concerned a suspected price-fixing cartel among cleaning service companies.

The incident was referred to the Hong Kong Police Force (HKPF) for criminal investigation.  The case was brought for plea on 29 August 2024 and adjourned to 10 October 2024.

Criminal consequences of non-compliance

The HKCC is empowered by the Ordinance to require individuals and companies to produce documents and/or information which it reasonably believes is relevant to an investigation of contravention of rules in the Ordinance.  Failure to comply with a requirement to produce such documents and/or information is a criminal offence, punishable by fine and imprisonment.

Destroying and/or falsifying documents which are required to be produced would similarly attract criminal liability.

First of its kind, but more expected

This marks the first criminal prosecution for non-compliance with the HKCC’s investigation powers.  Similar prosecution is however nothing new to other regulatory authorities in Hong Kong. 

For instance, with respect to certain investigations relating to initial public offerings conducted by the Hong Kong Securities and Futures Commission (SFC), criminal proceedings were commenced in late-2023 against a company and its executives for failure to fully comply with the SFC’s notices seeking records and interview notices respectively.

The HKCC has made clear in its statement that it will “remain steadfast in its commitment to performing its functions, investigate possible contraventions of the [Ordinance] and adopt appropriate follow-up actions where contraventions have been identified”.

While the recent prosecution is the first of its kind, it will certainly not be the last one.  This case serves as a timely reminder to those subject to the HKCC’s investigation powers that the antitrust authority is as ready to work with the HKPF and prosecute any failure to comply as any other regulatory authority.