The Competition Commission has released the results of its market study into the building renovation and maintenance market, revealing that bid-rigging may be widespread in the industry.
The Commission found patterns consistent with bid-rigging after analysing records from about 500 tenders issued by the Urban Renewal Authority and the Hong Kong Housing Society.
The tenders were for the appointment of consultants to plan and oversee renovation and maintenance projects and the appointment of contractors to carry out the renovation works.
The suspected bid-rigging occurred prior to the Competition Ordinance coming into effect in December 2015, and as such would not have breached competition law. However, the Commission is likely to investigate further if it detects bid-rigging going forward.
The Commission has launched a campaign aimed at raising awareness of bid-rigging. As part of the campaign, the Commission has published a brochure for procurement professionals on preventing and detecting bid-rigging. The “Getting the most from your tender” brochure includes tips on structuring the tender process to encourage competition and lessen the risk of bid-rigging.
Businesses and individuals that are found to have engaged in bid-rigging may be exposed to severe penalties.
Newspaper Association Withdraws Price Recommendations amid Antitrust Concerns
The Hong Kong Newspaper Hawker Association has withdrawn a notice to members recommending a retail price for branded cigarettes after the Commission raised concerns. The notice advised members to increase prices, and a number of newspaper hawkers followed the advice. The Association agreed to withdraw the notice after meeting with the Commission in May 2016.
Treasury Markets Association Changes Method for Setting FX Spot Benchmarks
The Treasury Markets Association ("TMA") has announced that two FX spot benchmarks administered by the TMA will adopt a transaction-based determination mechanism with effect from 1 August 2016. The move comes after global financial markets have been hit by benchmark manipulation scandals in recent years.
The new system will anchor the benchmarks by observable, bona fide, arm’s length transactions, the TMA said. Under the current system, the benchmarks are calculated from submissions of contributors. The relevant benchmarks are the TMA USD/HKD and USD/CNY(HK) 11am Spot Rates.