The first step: The Hong Kong Competition Commission (HKCC) enforces non-compliance with investigatory powers | A&O Shearman

For the first time since its establishment over a decade ago, the Hong Kong Competition Commission (HKCC) has announced that charges have been brought against an individual for failing to exercise its investigatory powers under the Competition Ordinance (Cap. 619) (Ordinance).

Deletion during search

The perpetrator 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 destruction and misappropriation of documents. The investigation concerned an alleged price-fixing cartel among cleaning companies.

The incident has been referred to the Hong Kong Police (HKPF) for criminal investigation. The case was scheduled for hearing on August 29, 2024 and adjourned to October 10, 2024.

Criminal consequences for non-compliance

The HKCC is empowered by the Ordinance to request individuals and companies to produce documents and/or information that it reasonably believes are relevant to the investigation of breaches of the provisions of the Ordinance. Failure to comply with a request to produce such documents and/or information is an offence punishable by fine and imprisonment.

The destruction and/or falsification of documents to be presented would also result in criminal prosecution.

The first of its kind, but more expected

This is the first prosecution for failure to exercise the HKCC’s investigative powers, but similar prosecutions are nothing new for other regulators in Hong Kong.

For example, with regard to certain investigations relating to IPOs conducted by the Hong Kong Securities and Futures Commission (SFC), criminal proceedings were initiated against a company and its executives at the end of 2023 for failing to fully comply with the SFC’s requests to provide documents or to obtain interviews.

The HKCC made it clear in its statement that it would “remain true to its obligation to carry out its duties, investigate possible breaches of the [Ordinance] and to take appropriate follow-up measures in the event of infringements identified.”

While the latest prosecution is the first of its kind, it will certainly not be the last. This case serves as a timely reminder to those subject to the HKCC’s investigative powers that the antitrust authority is as willing to cooperate with the HKPF and prosecute violations as any other regulator.