COMPETITION COMMISSION v. GRAY LINE TOURS OF HONG KONG LTD AND OTHERS

CTEA 1/2022

[2026] HKCT 1

IN THE COMPETITION TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COMPETITION TRIBUNAL ENFORCEMENT ACTION NO 1 OF 2022

________________________

BETWEEN

	COMPETITION COMMISSION	Applicant
	and
	GRAY LINE TOURS OF HONG KONG LIMITED	1st Respondent
	HARBOUR PLAZA 8 DEGREES LIMITED	2nd Respondent
	HARBOUR PLAZA HOTEL MANAGEMENT LIMITED	3rd Respondent
	PRUDENTIAL HOTEL (BVI)  LIMITED	4th Respondent
	TAK HOW INVESTMENT LIMITED (TRADING AS INTERCONTINENTAL GRAND STANFORD HONG KONG)	5th Respondent
	WU SIU IENG MICHAEL	6th Respondent

________________________

Before:

Hon Harris J, President of the Competition Tribunal in Court

Dates of Hearing:	12 – 14, 17, 19 February 2025
Date of Judgment:	4 March 2026

________________________

J U D G M E N T

________________________

INDEX
Description	Paragraphs
Introduction…………………………………...............................	1 – 8
Factual Background...……………………………………............	9 – 22
The Alleged Contravening Arrangement…………………………	23 – 25
The Enforcement Proceedings…………………………………	26 – 28
The Standard of Proof...…………………………………............	29 – 34
Exchange of Information………………………………...............	35 – 38
The First Conduct Rule……………………………….................	39 – 51
Facilitation……………………………………………………….	52 – 65
Principles of Statutory Interpretation……………………............	66 – 75
Contravention by Object…………………………………………	76 – 87
Is the alleged Subject Arrangement anti-competitive by Object?.	88 – 90
Were Gray Line and Tink Labs separate undertakings?................	91 – 93
Subject Arrangement…………………………………………….	94 – 98
Ad Hoc Nature of the Arrangement…………………………………	99 – 100
The Discussions with HP8……………………………………….	101 – 111
Findings……………………………………………………….....	112 – 132
Is Facilitation Made Out on the Facts?..........................................	133 – 141
Disposition……………………………………………………….	142

Internal cross-references are in the following form [number in bold]

Introduction

1.  The present case concerns arrangements made by the 1^st Respondent, Gray Line Tours of Hong Kong Limited (“Gray Line”), Tink Labs Limited (“Tink Labs”)  and the 2^nd, 4^th and 5^th Respondents, which are hotels said by the Commission to contravene the First Conduct Rule (“FCR”)  contained in section 6 of the Competition Ordinance (Cap. 619)  (“Ordinance”).  The arrangements relate to the sale of tickets for attractions such as Hong Kong Disneyland, Ocean Park, and the Peak Tram, among others.  Gray Line operated tour counters at the hotels at which tickets were sold, while Tink Labs provided “handy devices”, a smartphone-like device, installed in hotel rooms.  These devices allowed hotel guests to purchase tickets for attractions through a dedicated interface.  Gray Line and Tink Labs competed for the sale of tickets to hotel guests.

2.  The arrangements, which I explain in detail later, are said by the Commission to have involved fixing the price at which Gray Line and Tink Labs would sell tickets to guests of the hotels.  Gray Line and the 4^th, 5^th and 6^th Respondents have admitted the contravention of the FCR and the proceedings against them were concluded by the Kam Kwong procedure[1].  Tink Labs has not been proceeded against by the Commission.  It was Tink Labs that had reported the matter to the Commission.  It ceased operations in mid-2019.  The Commission alleges that the 2^nd and 3^rd Respondents (Harbour Plaza 8 Degrees Limited and Harbour Plaza Hotel Management Limited, which I shall refer to as “HP8” and “HPM” and collectively as the “Respondents”)  facilitated the price-fixing arrangement between Gray Line and Tink Labs at the Harbour Plaza 8 Degrees hotel (“Hotel”)  which was owned by HP8 and managed by HPM.  Gray Line has accepted that the arrangement in respect of the Hotel contravened the FCR.

3.  The catalyst for the arrangement said to contravene the FCR were concerns raised in March 2016, by Gray Line with various hotels about Tink Labs’ discounting ticket prices.  Gray Line argued that these discounts created customer confusion and threatened its business.

4.  By May 2016, Gray Line and Tink Labs had allegedly implemented a price-matching arrangement at several hotels, including Hotel Panorama by Rhombus, Prudential Hotel and Marco Polo Hotels. The arrangement involved Gray Line providing its ticket prices to the hotels, which then communicated them to Tink Labs in order that Tink Labs could adjust its prices to match those of Gray Line.

5.  The Commission alleges that the Respondents facilitated the implementation of the Subject Arrangement[2] at the Hotel beginning in August 2016.  In summary, the Commission claims that they relayed Gray Line’s ticket prices through their staff, who acted as intermediaries between Gray Line and Tink Labs, facilitating the exchange of pricing information and ensuring the implementation of the arrangement.  Unlike Gray Line and the 4^th, 5^th and 6^th Respondents, the Respondents have not conceded the contravention of the FCR and this is the Judgment on liability.

6.  The Ordinance is still relatively new legislation having come into effect on 14 December 2015.  As a consequence of the nascent state of Hong Kong’s competition law the trials of liability that have taken place, of which this is the 5^th, have all required the Tribunal to consider issues of principle, the resolution of which will shape the development of competition law in Hong Kong and the application of the Ordinance.  In the present case, the most important issue is whether the inclusion in the Ordinance of section 91[3] supports an interpretation of section 6 that excludes from its ambit cases of facilitation of an agreement or a concerted practice, which under the Treaty of Rome or English legislation would be treated as a contravention of the FCR.  In addition, the Tribunal is asked to determine what is required for an alleged contravention to be assessed as an agreement or concerted practice by object rather than by effect.  The latter would require the agreement or concerted practice to be proved to be anti-competitive.  These are issues of considerable importance in the development of competition law in Hong Kong.

7.  The case against the Respondents advanced in [99] of the Notice of Originating Application (“ONA”)  is that Gray Line and Tink Labs “together with each of the Hotels as facilitators, made and gave effect to an agreement to, and/or engaged in the concerted practice of, fixing and/or controlling the price of the Tickets….”.  In [103] of the ONA the Commission pleads its case in respect of tickets sold at the Hotel: “It is averred that the Subject Arrangement between Gray Line and Tink Labs in relation to the Tickets Sold at [the Hotel], as facilitated by [HP8] and [HPM] …. was made and given effect to in accordance” with matters particularised in the remainder of the paragraph.  In [106] it is again asserted that the arrangement, which is the contravening price-fixing arrangement reached between Gray Line and Tink Labs was “... facilitated by [HP8] and [HPM], commenced on 1 August 2016 and continued until 8 May 2017   ”.  In [137] it is pleaded that the Respondents had contravened the FCR “in that they had facilitated the price fixing agreement.” and in [138] that HP8 and HPM had “direct responsibility for the contravention”.  The facilitation is pleaded in [137.3.3] to be that HP8 “... actively procured Tink Labs to agree to and act in accordance with the Subject Arrangement, and actively provided Tink Labs with information from Gray Line as to the Published Prices to enable, and with the intention that, Tink Labs implement the Subject Arrangement”.  In the Prayer to the ONA the Commission seeks against the Respondents declarations that they had each contravened section 94(1) and section 1(a) of Schedule 3 to the Ordinance.  The Commission accepts that it has not advanced an alternative case under section 91.  If I find that section 6 does not extend to facilitation and that such a complaint in Hong Kong must be brought under section 91, the Commission’s case fails.

8.  Similarly, if I find that to establish a contravention by object the Commission has to prove by evidence that the object was anti-competitive rather than simply demonstrate that it falls into a category of recognised inherently anti-competitive arrangements and practices, the complaint fails as the Commission has not advanced evidence to prove that the object relied on was anti-competitive.

Factual Background

9.  Gray Line is a Hong Kong company.  It was an established operator in the tourist industry, which, as I have mentioned, provided travel-related services.  It did so at hotels through two means.  First, by promotion and sale of tour products through hotel concierges.  Secondly, by the operation of tour counters for which it paid a monthly rental and for some hotels (but not the Hotel)  a share of revenue.  Gray Line ceased this mode of operation following the COVID-19 pandemic.

10.  In addition to the Hotel, Gray Line provided the same services at a number of other hotels in Hong Kong.

(1)  InterContinental Grand Stanford Hong Kong (“ICGS”);

(2)  Holiday Inn Golden Mile (“HIGM”);

(3)  Prudential Hotel (“Prudential”);

(4)  Royal Plaza Hotel, Royal Park Hotel and Royal View Hotel (collectively, “Royal Hotels”);

(5)  The Gateway Hotel, The Prince Hotel and The Marco Polo Hongkong Hotel (collectively, “MP Hotels”);

(6)  City Garden Hotel (“City Garden”); and

(7)  Hotel Panorama by Rhombus (“Panorama”).

11.  Gray Line sold tickets for the following attractions and transport services: Hong Kong Disneyland, Ocean Park, the Peak Tram, Big Bus, Ngong Ping 360, Disney Themed Magical World, Madame Tussauds and the Airport Express.  Gray Line purchased the tickets from the attractions on a wholesale basis and at wholesale prices.  In addition, Gray Line provided other travel-related services including applying for visas for entry to the Mainland, arranging limousine services and handling general enquiries from guests.

12.  Gray Line had operated a tour counter at the Hotel since 2009.  It was responsible for staffing and operating the tour counter and its operational expenses.  In return, Gray Line paid HP8 a monthly licence fee of HK$5,000 and 10% of its gross turnover, subject to a minimum payment of HK$4,500.

13.  HP8 disputes that Gray Line sold tickets to Big Bus, Disney Themed Magical World and Madame Tussauds at the Hotel.  However, given the evidence of Ronald Wu Keng Hou, who was at the material time in charge of Gray Line’s Sales and Marketing Team, in his witness statement (on which he was not cross-examined)  and an email to Kenneth Chan Kai Chiu dated 30 May 2016, it appears likely that it did and I so find.

14.  The material members of Gray Line’s staff were Michael Wu Siu Ieng (the 6^th Respondent), who was a director and in overall charge of Gray Line’s operations.  He was Gray Line’s managing director until 2022.  Ronald Wu, who was responsible for sales counters and branch offices.  Eddie Wu Fuk Cheung, who was a senior manager responsible for quality services and marketing up to December 2019 when he left Gray Line.  He was responsible for managing and monitoring Gray Line’s tour counters in hotels.

15.  Tink Labs was a new Hong Kong company also offering travel-related services to hotel guests, but rather than doing this through traditional tour counters it placed its handy devices in hotel rooms, which guests could use to book tickets to tourist attractions and use for free local and international telephone calls, texting and accessing the internet; functions, which were very popular with hotel guests.  This made their installation attractive to hotels.  In 2017, Tink Labs partnered with 150 hotels in Hong Kong, with approximately 40,000 guests rooms.

16.  Tink Labs’ agreements with their partner hotels had varying terms.  The standard practice was to give the hotel a 12-month free trial period, after which Tink Labs would charge a monthly per-device rental fee.  Other hotels, like the Hotel, were offered the handy devices free of charge for the duration of the contract.

17.  Tink Labs covered the cost of running the handy devices including the IDD calling features and mobile internet access.  In addition to the rental income Tink Labs obtained revenue from advertising on the handy devices and selling tickets.  The tickets it sold through the handy devices included those offered to guests by Gray Line at its tour counters.  Tink Labs provided handy devices to HP8 pursuant to a licence agreement dated 1 March 2016 and they were put in the Hotel’s guest rooms in about August 2016.

18.  The Respondents have only admitted that Tink Labs sold tickets to Disneyland and Ocean Park at the Hotel.  However, the Respondents’ own witness statements and the screenshots appended to an email dated 1 August 2016 from Shui Leung to Agnes Poon, both of Tink Labs, evidence that tickets to other attractions were offered on handy devices to guests of the Hotel, and I so find.

19.  As I have mentioned, Tink Labs ceased business in 2019. It was Tink Labs, which made a complaint to the Commission on 24 January 2017, that brought the subject matter of these proceedings to the attention of the Commission.  Tink Labs applied for leniency and entered into a leniency agreement with the Commission on 17 May 2017.

20.  Agnes Poon was Tink Labs’ Hospitality Account Manager, who dealt with partner hotels.  Her role was to maintain the relationship between Tink Labs and its partner hotels once they had signed up to the services of the handy devices.  Her main responsibilities included providing training on the handy devices to partner hotels, marketing the value of the handy devices, upselling new features on the handy devices and dealing with customer complaints which were escalated from a hotel’s customer services department.  Ms Poon gave evidence at the trial.

21.  The Respondents accept that HP8 and HPM are a single undertaking for the purposes of section 6.  The General Manager of HP8 was Christina Cheng Man.  The Director of HP8’s front office from 1 January 2015 to 1 January 2017 was Kenneth Chan, who was thereafter its director of rooms.  Mr Chan could make his own decisions about operational issues, which did not affect HP8’s revenue.

22.  Mr Chan had frequent contact with Gray Line.  He had daily courtesy exchanges with Gray Line’s staff at its tour counter.  In [16] of his witness statement he refers to having meetings with Gray Line prior to May 2016.  He denied this in his oral evidence.  This volte-face seemed to be instigated by Mr Chan being presented with unhelpful written accounts of the meetings, which he denied having taken place.  I prefer his original and more probable evidence that “he had several contacts with representatives of Gray Line and Tink Labs” before 12 May 2016.

The Alleged Contravening Arrangement

23.  There is no dispute that Gray Line and Tink Labs made the type of arrangement with other hotels alleged by the Commission to have been made between them and the Respondents.  The Commission contends that the arrangement (which I shall refer to as the “Subject Arrangement”)  arose as follows.

24.  In March 2016, upon the instruction of Michael Wu, Gray Line’s staff contacted its partner hotels complaining that Tink Labs was selling tickets at a price lower than those charged by Gray Line.  Gray Line charged the official price published by the relevant tourist attractions and transportation services.  In addition, Gray Line suggested there was a risk of the hotels becoming liable in respect of services obtained through the handy devices and the risk of guests complaining about the pricing differentials.

25.  The partner hotels which received Gray Line’s complaints passed them to Tink Labs.  Communications passed between the hotels, Gray Line and Tink Labs, which resulted in an agreement (which the Commission says was made between each hotel and Gray Line and Tink Labs)  that Tink Labs would raise the prices of its tickets to match the published prices used by Gray Line and Gray Line would pass these prices to the hotels for onward transmission to Tink Labs.  These agreements constitute, so the Commission contends, the Subject Arrangement.  It was agreed during the following periods in respect of the following hotels:

Dates of Reaching the Subject Arrangement	Hotels
10-18 May 2016	Panorama
25-27 May 2016	Prudential
20-22 June 2016	Royal Plaza
Mid-July 2016	MP Hotels
1 August 2016 (see below)	Hotel
26-29 August 2016	HIGM
7 September 2016	ICGS
21 September 2016	City Garden

The Enforcement Proceedings

26.  From July 2018, the Commission began engaging in a cooperation process with various of the hotels.  Gray Line has been cooperating with the Commission since 2019.

27.  On 26 January 2021, the Commission issued section 67 infringement notices to the undertakings behind City Garden, MP Hotels, HIGM, Royal Plaza and Panorama, which then proceeded to give commitments to the Commission in accordance with the notices.

28.  In the case of the other hotels:

(1)  The Commission commenced these proceedings on 20 January 2022.

(2)  Gray Line, Michael Wu and the entity forming the undertaking behind ICGS agreed to dispose of the proceedings by way of the Kam Kwong procedure, which was determined by the Tribunal on 12 July 2022.

(3)  The 4^th Respondent admitted liability, but there was a dispute as to matters that were relevant to the penalty.  Judgment was handed down on 25 March 2025[4].

The Standard of Proof

29.  In Competition Commission v Nutanix Hong Kong Limited (No.3)  & Ors[5] the then President of the Tribunal, Godfrey Lam J, explains that the Commission accepts, in his view (with which I agree)  correctly, that in cases such as the present the Tribunal is asked to determine a criminal charge within the meaning of Articles 10 and 11 of the Bill of Rights[6].  For the reasons explained in [51] to [72] of his Judgment the President explains why, contrary to the submissions of the Commission, in his view the criminal standard of proof applies, namely, that a contravention has to be proved beyond all reasonable doubt.  The Commission does not accept the President’s reasoning or conclusion.  In Commission v W Hing Construction Co Ltd (No. 4)[7] the Commission invited the Court of Appeal to determine the question.  The Court of Appeal declined to do so and stated that it would be better resolved in a case in which it has a real impact.  This has had the unsatisfactory consequence that in each subsequent trial the Commission has raised the issue before me and I have taken the view that as I do not consider the decision to be clearly wrong, if the President’s decision is to be reconsidered this should be done by the Court of Appeal[8].  Therefore, the Tribunal will, unless at some point Nutanix is overturned, proceed on the basis that the criminal standard of proof applies.  Other than for the standard of proof I do not understand there to be any material controversy over the principles by reference to which the Tribunal determines whether or not a contravention has been proved.

30.  The Tribunal has to be satisfied beyond all reasonable doubt that each element of the alleged contravention has been proved.  The practical consequence of this is that the Respondents do not have to prove anything and that they get the benefit of the doubt where any exists.

31.  Commonly, the existence of an anti-competitive practice or agreement may have to be inferred from several coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of infringement of the competition rules: Nutanix [73]–[74].  The present case is an example; it being the Commission’s case that an unlawful cartel agreement is to be inferred from the totality of the evidence.

32.  Where the criminal standard of proof applies three conditions must be satisfied for an inference to be drawn.  First, the inference must be grounded on clear findings of primary facts; secondly, the inference must be a logical consequence of those primary facts; and thirdly, the inference must be irresistible, in other words the only inference that can reasonably be drawn based on those facts[9]. It is not necessary for each item of evidence adduced to satisfy the criminal standard in respect of every aspect of the contravention.  It is sufficient if the body of evidence relied on, viewed as a whole, satisfies the burden[10].  Common sense inferences, including adverse inferences, may be drawn under the criminal standard[11].

33.  Even in cases in which the civil standard of proof applies a disciplined approach must be taken to the drawing of inferences. These principles are not controversial.  The court proceeds on the basis that serious misconduct is less likely than a lesser form of misconduct and consequently requires the evidence of serious misconduct to be of commensurate cogency[12]. In practice this means that the three conditions I have referred to in the previous paragraph have to be satisfied even if the alleged contravention is to be determined on the civil standard.  I do not understand this to be controversial between the Parties to the present matter.

34.  Plainly the evidential onus on the Commission is a high one and care is required in assessing whether the evidence that has been adduced proves each element of the alleged contravention.

Exchange of Information

35.  In [47]–[51] of the ONA the Commission asserts that an exchange of “competitively sensitive information”, (a term that includes information relating to price, pricing strategies, customers, production costs, quantities, turnover, sales, capacity, product quality, marketing plans, risks, investments, technologies and innovation), which is capable of removing uncertainty between participants in the market as to their conduct on the market “must be regarded as pursuing an anti-competitive object” [48] of the ONA[13]. The Commission goes on to assert that a causal connection between an exchange of competitively sensitive information and the market conduct of the participants between whom the information is exchanged may be presumed or inferred[14]. The Respondents contest this proposition on the basis that it reverses the burden of proof and is inconsistent with the presumption of innocence enshrined in the Hong Kong Bill of Rights.

36.  The Commission alleges in the present case that Gray Line and Tink Labs, through the medium of the hotels, exchanged information about the ticket prices they charged, and this led Tink Labs raise its prices to meet those of Gray Line.  This, contends the Commission, is evidence that an unlawful price fixing arrangement existed.  Before me the Commission accepted that the way in which such evidence operated was not as a presumption, but as the drawing of a probable inference as described in Phipson on Evidence (20^th ed., 2022)  at [1-17]: “The term ‘presumption of fact’ however is misleading.  Its only use is to describe inferences which the mind naturally and logically draws from given facts, irrespective of the legal effect.  Not only are they always rebuttable, but the trier of fact may refuse to make the usual or natural inference, notwithstanding there is no rebutting evidence.”  This does not shift the persuasive or evidential burden[15].

37.  The Competition Appeals Tribunal (“CAT”)  has considered how inferences and presumptions operate in the competition context in Napp Pharmaceutical Holdings Limited and Subsidiaries v Director General of Fair Trading[16]. The CAT found that although the civil standard of proof applied bearing in mind that infringements of the Act were serious matters attracting severe financial penalties, it was for the Director General of Fair Trading to satisfy the CAT on the basis of strong and compelling evidence, taking account of the seriousness of what is alleged, that the infringement is proved, the undertaking being entitled to the presumption of innocence, and to any reasonable doubt there may be.  However, the CAT continued, this did not in their view preclude the Director, in discharging the burden of proof, from relying on circumstances, inferences or presumptions that would, in the absence of any countervailing indications, normally flow from a given set of facts, for example that (A)  dominance may be inferred from very high market shares[17], (B)  sales below average variable costs may, in the absence of rebuttal, be presumed to be predatory[18], or (C)  that an undertaking present at a meeting with a manifestly anti-competitive purpose implies, in the absence of explanation, participation in the cartel alleged.  This is important because as Lam J observes in [57] of Nutanix[19]: “In most cases, the existence of an anti-competitive practice or agreement must (in the sense of ‘has to be’)  be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules”.

38.  The CAT refers to “presumptions” of this sort as simply being inferences that can normally be drawn from certain types of evidence and not reversing the burden of proof.  As I have mentioned the Commission is content to characterise this type of evidentiary process as involving the drawing of an inference from facts, which by their nature compellingly suggest that the matter to be inferred occurred.  Little turns on whether common constellations of facts, which point compellingly to the inference that the undertakings have come to an anti-competitive agreement or adopted  an anti-competitive practice, are described as giving rise to a presumption or justify drawing an inference of a contravening agreement or practice, as long as it is borne in mind that the burden of proof remains on the Commission, and although the persuasive burden might at certain points during a trial pass to the undertaking, as the criminal burden has to be met and the undertaking is entitled to the benefit of the doubt, little evidence may have to be adduced by the undertaking to demonstrate that the inference cannot properly be drawn.

The First Conduct Rule

39.  The FCR is defined in section 6 of the Ordinance:

“(1)  An undertaking must not –

(a)  make or give effect to an agreement;

(b)  engage in a concerted practice; or

(c)  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.

…

(3)  The prohibition imposed by subsection (1)  is referred to in this Ordinance as the ‘first conduct rule’.”

40.  The basic legal framework was succinctly summarised by the Tribunal in Commission v Kam Kwong Engineering Co Ltd[20], with reference to the detailed analysis in Commission v Nutanix Hong Kong Limited (No. 3)  & Ors[21]and Commission v W Hing Construction Co Ltd (No 2)[22].

41.  The FCR targets the actions of an “undertaking”, which is defined in section 2 of the Ordinance to mean “any entity, regardless of its legal status or the way in which it is financed, engaged in economic activity, and includes a natural person engaged in economic activity”.

42.  An “agreement” is defined in section 2(1) to include “any agreement, arrangement, understanding, promise or undertaking, whether express or implied, written or oral, and whether or not enforceable or intended to be enforceable by legal proceedings”.  As noted in Nutanix, [26]-[27], its central component is a meeting of minds or concurrence of wills between at least two parties, regardless of form:

“26. … the concept of agreement centres around the existence of a concurrence of wills between at least two parties,the form in which it is manifested being unimportant so long as it constitutes the faithful expression of the parties’ intention. It is sufficient that the undertakings in question should have expressed their common intention to conduct themselves on the market in a specific way. For the purpose of the first conduct rule, an agreement does not, in my view, require the same certainty as would be necessary for the creation of a contract enforceable at law.

27. The concurrence of wills does not have to consist in an explicit offer and acceptance. An agreement can equally exist where an apparently unilateral anti-competitive measure adopted by one party, constituting an invitation to another party, whether express or implied, to fulfil that goal jointly, receives the tacit acquiescence of that other party. It is not essential to have direct evidence of express communications; the existence of an agreement can be deduced from the conduct of the parties, subject of course to meeting the applicable standard of proof. The inclusion of ‘understanding’ in the statutory definition, in my view, reinforces that tacit dealings suffice and also shows that there can be an agreement even if there is nothing to prevent either party from going back on it.” (emphasis added, citations omitted)

43.  The concept of “concerted practice” is not defined in the Ordinance but, by reference to EU caselaw, the Tribunal has accepted the meaning developed in EU jurisprudence, namely “a form of coordination between undertakings by which, without it having been taken to the stage where an agreement properly so-called has been concluded, practical cooperation between them is knowingly substituted for the risks of competition”: Nutanix, [28].  The criteria of coordination and cooperation do not require the working out of an actual plan, and must be understood in the light of the concept that each economic operator must determine independently the policy which he intends to adopt on the market.  This implies direct or indirect reciprocal contact between the undertakings in question.  It occurs where one competitor discloses its future intentions or conduct on the market to another when the latter requests it or, at the very least, accepts it: see Nutanix [29]-[30].

44.  Further, at [31]-[32], the Tribunal said:

“31. The fact that only one participant reveals his future intentions or other competitive information is not sufficient to exclude the possibility of an agreement or concerted practice, since the recipient of the information in question cannot normally fail to take that information into account when formulating its policy on the market.

32. Any direct or indirect contact between economic operators of such a nature as to disclose to a competitor the course of conduct which they themselves have decided to adopt or contemplate adopting on the market, where the object or effect of such contact is to create conditions of competition which do not correspond to the normal conditions of the market in question, constitutes a concerted practice.” (citation omitted)

45.  Thus, contends the Commission, if an undertaking (A)  unilaterally communicates its future pricing intentions to another undertaking (B)  that would be enough to give rise to an agreement or concerted practice, because undertaking (B)  would be assumed to take it into account, unless it publicly distances itself from what competition law regards as an impermissible anti-competitive act.

46.  It is relevant in the context of this case that disclosure of competitively sensitive information can occur indirectly.  In [48] of Nutanix[23] Lam J refers to the English Court of Appeal’s decision in Argos Ltd and Littlewoods Ltd v Office of Fair Trading[24]in which the Court found that there may be a concerted practice where A discloses its pricing intentions in circumstances where A anticipates that B would make use of the information to influence market conditions by passing it on to C, and B passes the information to C in circumstances where C appreciates that the information is being passed to it with A’s concurrence.  This is because whether an undertaking has the relevant intent for the purposes of establishing an agreement or a concerted practice is a matter of objective evidence.  Intent can be established by the Commission demonstrating that the undertaking contributed by its own conduct to the common objective pursued by all participants and was aware of conduct, actual or planned, by other undertakings in pursuit of the same objectives.  Thus passive modes of participation in the contravention, such as the presence of an undertaking in meetings at which anti-competitive agreements are concluded, without the undertaking clearly opposing them, have been held by the Court of Justice of the European Union (“CJEU”)  to be capable of being indicia of collusion capable of rendering the undertaking liable under Art. 81(1) of the EU Treaty (now Art. 101(1)  of the Treaty on the Functioning of the EU (“TFEU”): AC-Treuhand AG v European Commission (Re Heat Stabilisers Cartel)[25].

47.  The CJEU in support of its conclusion in AC-Treuhand, cites Dansk Rorindustri A/S v Commission of the European Communities[26] and suggests in [30]–[31]:

“30. When, as in the present case, the infringement involves anti-competitive agreements and concerted practices, it is apparent from the Court’s case law that the Commission must demonstrate, in order to be able to find that an undertaking participated in an infringement and was liable for all the various elements comprising the infringement, that the undertaking concerned intended to contribute by its own conduct to the common objectives pursued by all the participants and that it was aware of the actual conduct planned or put into effect by other undertakings in pursuit of the same objectives or that it could reasonably have foreseen it and that it was prepared to take the risk (see, to that effect, judgments in Anic Partecipazioni at [86] and [87], and Aalborg Portland A/S v Commission of the European Communities (C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P)  EU:C:2004:6; [2005] 4 C.M.L.R. 4 at [83]).

31.  In that connection, the Court has held in particular that passive modes of participation in the infringement, such as the presence of an undertaking in meetings at which anti-competitive agreements were concluded, without that undertaking clearly opposing them, are indicative of collusion capable of rendering the undertaking liable under art.81(1)  EC, since a party which tacitly approves of an unlawful initiative, without publicly distancing itself from its content or reporting it to the administrative authorities, encourages the continuation of the infringement and compromises its discovery (see, to that effect, judgment in Dansk Rørindustri A/S v Commission of the European Communities (C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P)  EU:C:2005:408; [2005] 5 C.M.L.R. 17 at [142] and [143] and the case law cited).”

48.  I accept that it is consistent with established principle that a person is presumed to intend the natural and probable consequences of his acts and mens rea is a matter of intent only and does not depend on desire or motive[27]. However, although the consequence of remaining passive may be that an agreement is implemented that might otherwise have been avoided, in my view that is not a fact alone from which an inference of agreement can properly be drawn as alternative explanations such as a reluctance to be drawn into a controversy are so obvious that it cannot fairly be said that it is an irresistible inference.  I accept that silence during discussions is consistent with agreement to whatever is concluded, but the drawing of an inference of serious misconduct requires more than facts that are consistent with agreement. Although the Commission is correct in its submission that a party’s subjective intent is irrelevant when determining if a legally enforceable contract has been concluded, this in my view does not preclude evidence being adduced explaining the silence.  As I have already explained given that the standard of proof is the criminal standard the undertaking is entitled to the benefit of the doubt and if an undertaking adduces evidence of a credible explanation for passivity it will be difficult for the Tribunal to infer from a failure to object to a proposed anti-competitive agreement or concerted practice that the undertaking agreed to it.  I accept that it may be that although the evidence does not prove agreement at the time the agreement is alleged to have been reached, evidence of subsequent events demonstrates an undertaking becoming a party to the alleged agreement or a subsequent concerted practice.  However, the more complicated the evidential basis for inviting the Tribunal to infer an agreement to an anti-competitive agreement or concerted practice, in the absence of direct evidence, the greater the care required in determining what inferences can properly be drawn given the relevant law in Hong Kong.

49.  As I explain in [24] of Kam Kwong the distinction between an agreement and a concerted practice is a difference in focus and emphasis.  Between them they are intended “to catch forms of collusion having the same nature which are distinguishable from each other only by their intensity and the forms in which they manifest themselves.”[28]  The Commission argues that the consequence of the expansive meaning of agreement or concerted practice, is that unilaterally communicating future pricing intentions is enough to give rise to an agreement or concerted practice because the recipient of that information would be presumed to take it into account unless it publicly distances itself from it.  However, as I understood the Commission’s case this applies to information communicated in circumstances in which it is demonstrated that it was probably intended to be taken into account by another market participant or this can reasonably be assumed.  I note that in [21(v)] of the judgment in Argos Ltd and Littlewoods Ltd v Office of Fair Trading[29] the position is summarised in the Appeal Tribunal’s list of uncontroversial propositions of law drawn from judgments of the CJEU and the Court of First Instance, as follows: “Although the concept of a concerted practice implies the existence of reciprocal contacts, that requirement may be met where one competitor discloses its future intentions or conduct on the market to another when the latter requests it or, at the very least, accepts it: Cimenteries v Commission [2000] ECR II-491.” This is consistent with it being necessary for the Commission to demonstrate at the very least that the provision of information was not a unilateral action with no consequences for the operation of participants in the relevant market but was information which it can properly be inferred the recipient took into account.  I also note that in [31] of his judgment in Nutanix Lam J does not say that it is sufficient for one participant to reveal his intentions, he says that the fact that only one participant does so “is not sufficient to exclude the possibility of an agreement or concerted practice”.

50.  Assessing whether or not the recipient of information took the information into account requires careful consideration of the context in which the communication took place.  If the relevant undertaking is one of a number of attendees at a meeting at which the Tribunal is satisfied that anti-competitive practices or agreements were discussed and the recipient’s subsequent actions were consistent with what was discussed, the Tribunal may be able to infer that although remaining silent the relevant undertaking concurred with what was proposed.

51.  This is not to say that mere attendance without objection at a meeting at which an anti-competitive agreement or practice is concluded is sufficient to establish that a person is a party to an anti-competitive agreement or has agreed to a concerted practice; rather that it is indicative of collusion.  I would note that in my view [31] of Dansk Rorindustri[30] is problematic as it conflates different things: first, that failure to object to a proposed anti-competitive agreement or practice is indicative of collusion and, secondly, that it is indicative since a party which tacitly approves an anti-competitive practice without publicly distancing itself from the proposal encourages continuation of an infringement and compromises its discovery.  Not opposing an anti-competitive agreement or practice can indicate collusion, but not because it encourages further infringements.  It is an indicium of collusion, because it is consistent with approval.  Tacit approval (if proved)  may be part of the facts found that justify concluding that a person was a party to an agreement or practice, which is anti-competitive, but this is a consequence of the finding of the necessary primary facts, not because if the person had spoken out it might have discouraged infringement or possibly facilitated discovery of an infringement.

Facilitation

52.  The Commission alleges contravention of section 6 by virtue of the Subject Arrangement made between Gray Line and Tink Labs in relation to tickets sold at the Hotel as facilitated by each of the Respondents between 1 August 2016 and 8 May 2017 when Tink Labs ceased complying with the Subject Arrangement[31].  The Respondents contend that the FCR does not cover facilitation of an agreement that contravenes a conduct rule by an undertaking that is not a participant on the market on which the contravention is alleged to have occurred.  The Ordinance, unlike the TFEU[32], contains an express provision, section 91, which addresses facilitation of cartel conduct if certain matters are proved.  Thus, any case against the Respondents, which the Commission’s own case makes clear were not parties to a price fixing arrangement and are not participants on the market, should have been brought under section 91.  The Commission accepts that if this is correct (which of course it disputes)  its case fails because it has not brought an alternative case under section 91.

53.  In its written submissions the Commission describes what it sees as the issue in the following terms: even though HP8 was not a competitor and did not fix the prices of the tickets itself, HP8’s conduct in facilitating the price fixing conduct by Gray Line and Tink Labs could constitute a contravention of the FCR.  I did not understand the Respondents to dispute that this is an accurate brief description, although the Respondents go further and say that even if section 6 applies in the same way as Article 101(1) matters capable of constituting facilitation in the sense accepted by the CJEU have not been proved.

54.  Section 91 provides that:

“Persons involved in contravention of competition rule

A reference in this Part to a person being involved in a contravention of a competition rule means a person who—

(a)  attempts to contravene the rule;

(b)  aids, abets, counsels or procures any other person to contravene the rule;

(c)  induces or attempts to induce any other person, whether by threats or promises or otherwise, to contravene the rule;

(d)  is in any way, directly or indirectly, knowingly concerned in or a party to the contravention of the rule; or

(e)  conspires with any other person to contravene the rule.”

Pursuant to section 2, a person includes an undertaking.  As Lam J explains in Nutanix[33] this provision is couched in language familiar to the criminal law and is partly based on Australian legislation, incorporating elements of sections 75B and 76(1) of the Competition and Consumer Act 2010 (Cth)[34] (“CCA”), which are in turn derived from sections 5, 7A and 86 of the Crimes Act 1914 (Cth)[35].

55.  Section 92 provides in sub-section (1) that the Commission if it considers it appropriate may apply to the Tribunal for a pecuniary penalty to be imposed on any person it has reasonable cause to believe (a)  has contravened a competition rule[36]; or (b)  has been involved in a contravention of a competition rule.  The Respondents submit that section 92(1)(b) applies to a person who has been involved in the matters specified in section 91.  Sections 93(1) and 94(1) also recognise the same two distinct grounds of liability.  One arising from contravention of a rule.  The second arising from involvement in a contravention.

56.  If the Respondents are correct and a case brought against a facilitator must be brought under section 91, this requires the Commission (so the Respondents argue, although it is not a matter that has to be addressed in the present case)  to prove the components of whichever of the categories of involvement specified in section 91 are alleged to have occurred and this would be more challenging than proving facilitation of an anti-competitive agreement or concerted practice, because it will be necessary for the Commission to prove intent.

57.  The Commission has, however, framed its case as a contravention of section 6 and a consideration of this issue starts with the language of that section.  Section 6 provides that an undertaking must not make or give effect to an agreement or engage in a concerted practice if the object or effect of the agreement or concerted practice is to prevent, restrict or distort competition in Hong Kong.  The language itself does not limit the undertakings caught by the FCR to parties to an anti-competitive agreement on the same market.  The Commission submits that this is consistent with the purpose of the FCR, which is to “prohibit conduct that prevents, restricts or distorts competition in Hong Kong.”[37]  The Respondents’ argument that section 6 should be given a narrower reading than Article 101(1) develops from the absence of an equivalent to section 91 in the EU and English legislation.  The Respondents contend that section 91 is directed to forms of facilitation of a contravention (i.e. “aids, abets, counsels, or procures”, section 91(b), which for convenience I shall hereafter refer to as “aiding and abetting” unless the context otherwise indicates)  of the FCR.  Consequently, if the Commission believes an undertaking has aided and abetted a contravention of the FCR the proceedings should be brought under sections 91 and 92.  Alternatively, the Respondents raise a subsidiary argument that the liability of a facilitator must be subject to the same controls specified in section 91.

58.  As is clear from the language of section 91, the section is only engaged if there has been a contravention of a competition rule.  The Commission contends that it is also clear from section 91(d) that “involvement” includes being an undertaking which is a party to a contravention.  Section 91, therefore, does not itself help in determining what constitutes a contravention. 

59.  HP8 disputes this.  It argues that the word “party” in section 91(d) is used to connote a participant in the nature of an accessory.  HP8 submits that this is apparent from the High Court of Australia’s decision in Yorke v Lucas[38]. Section 75B of the CCA provides that reference to a person involved in a contravention shall be read as reference to a person who:

“(1)….

(a)  has aided, abetted, counselled or procured the contravention; or….

(c)  has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or….”

60.  The High Court first considered the meaning and effect of section 75B(1)(a) and whether it imported the requirements of criminal law that would require it be demonstrated that the respondent intentionally aided, abetted, counselled or procured a contravention of section 52 of the Trade Practices Act.  The High Court found that the necessary intent required knowledge of the essential matters which constitute a contravention whether a person knows or not that those matters constitute a contravention.  The High Court then considered what element of knowledge was required for section 75B(1)(c) to apply and found that a person must have knowledge of the essential facts constituting the contravention[39].  The High Court continues: “It might be thought possible to construe the express requirement of knowledge as extending not only to being ‘concerned in’ but also to being ‘party to’ a contravention.  However, there are two reasons, in our view, why it is inappropriate to do so.”  The second reason was that the word “knowingly” would be an unnecessary qualification to the words “party to” as in the context of the paragraph, a person could only properly be said to be a party to a contravention if his participation was in the context of knowledge of the essential facts.  The wording of paragraph (c)  pointed to the conclusion that the words “party to” referred to “a participant in the nature of an accessory.”  The Respondents submit that this demonstrates that section 91(d) is concerned with accessorial parties, not the principal parties.  If the submission is correct, it would support an interpretation of section 91 that excludes an undertaking that has contravened the FCR and support the Respondents’ contention that facilitation, which has the characteristics of aiding and abetting is caught by section 91, not section 6.

61.  The Respondents say that the Commission’s contention that sections 6 and 21 of the Ordinance are concerned with liability, while the purpose of section 91 is to define the scope of the remedies that may be granted by the Tribunal in enforcement proceedings and that section 91 is simply concerned with providing accessorial liability as an alternative basis for liability, betray a misunderstanding of section 91’s function and scope.  The Respondents reason as follows.

62.  Section 91 is not, or at least not only, a provision creating accessorial or secondary liability. Sections 91(a) and (c) concern attempts.  An attempt is not a mode of secondary liability.  It is a free standing, inchoate offence. Liability is not contingent on commission by some other person of a primary offence.  An attempt cannot be prosecuted where the actual substantive offence is completed[40]. A charge of attempt necessarily presupposes that the offence charged was not completed[41].

63.  Conspiracy in section 91(e) is also an inchoate offence not a mode of secondary liability.  Section 159A of the Crimes Ordinance, Cap. 200, defines a conspiracy.  A conspiracy can be prosecuted even though the agreement is never carried into effect, although unlike attempt there is no bar to pursuing conspiracy charges where the substantive offence is completed.

64.  Section 91(d) applies where a person “is in any way, directly or indirectly, knowingly concerned in or a party to the contravention of the rule”.

65.  HP8’s argument may be summarised as follows: the activity of an undertaking can be either (1)  a contravention of a competition rule or (2)  aiding and abetting a contravention of a competition rule.  If the facts relied on by the Commission constitute aiding and abetting it follows that the undertaking has not contravened a competition rule.  I will consider the reasoning, which supports this argument in the following paragraphs, starting with principles of statutory interpretation.  I would note at this point that this argument leaves open the possibility that section 6 can apply to an undertaking, which is not active on the relevant market, whose activities go beyond aiding and abetting other undertakings active on the market making or giving effect to an agreement or concerted practice that is anti-competitive and constitutes a contravention of a competition rule.  This is not a possibility the Commission’s submissions accommodate.

Principles of Statutory Interpretation

66.  Section 19 of the Interpretation and General Clauses Ordinance, Cap. 1, provides that “An Ordinance shall be deemed to be remedial and shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance according to its true intent, meaning and spirit.” The general principles that emerge from the case law are not controversial and were summarised by Barma JA in Re Sng Allan, ex p Orient Securities (Hong Kong)  Ltd[42], [14]–[15].  The Court will apply a contextual and purposive approach to giving effect to the legislative intent whilst having due regard to the natural and ordinary meaning of the words used.  When considering the context in which a statutory provision is to be interpreted the Court will have regard to the whole legislative and sub-legislative framework, of which the provision forms part as well as the legislative history and the legislation’s legal and social background[43]. The Court may have regard to legislative materials, such as Law Reform Commission reports leading to the legislation, and the explanatory memoranda of legislative bills.  Interpretation should so far as the wording allows accord with common sense and the Court should lean against interpretations which produce absurd, irrational or anomalous results.

67.  In addition to these general principles the Respondents drew my attention to the following.  Where the literal meaning of a general enactment covers a situation for which specific provision is separately made within the same legislation, it is presumed that the situation was intended to be dealt with by the specific provision[44]. The Respondents contend that accordingly the Legislature having included a specific provision to deal with aiding and abetting, section 6 is to be interpreted as excluding it.  The Respondents argue that this presumption applies more firmly in cases involving significant penalties.  This is explained by Fok PJ in T v Commissioner of Police[45]: “It is a principle of statutory interpretation that a person should not be penalised except under clear law.  Therefore, when considering opposing constructions of a statutory provision, the court presumes the legislature intended to observe this principle and should strive to avoid adopting a construction which penalises a person when the legislator’s intention to do so is doubtful.”  In the present context this is relevant in directing attention to the question of what conduct section 91(d) was intended to cover as opposed to conduct which constitutes a contravention under section 6, and supports the conclusion that conduct that constitutes aiding and abetting a contravention of a conduct rule cannot also be conduct that itself constitutes a contravention of the rule.

68.  The Commission argues that section 91 is contained in Part 6 of the Ordinance, titled “Enforcement before Tribunal”.  This is the part of the Ordinance that provides remedies for contravention of the Ordinance.  Orders under sections 93, 94 (save for one exception)  and 95 may be made against persons who have either (A)  contravened a competition rule or (B) been “involved in a contravention of a competition rule.”  In its written Closing Submissions the Commission contends that the role of section 91 is to define the persons who have been involved in a contravention of a competition rule for the purpose of identifying the subjects against whom the Tribunal may order remedies pursuant to section 92(1)(b).  It is not to define or delimit the scope of the contravention itself.  The very fact that the language is a person involved in “a contravention” is alone enough to make it clear it is not seeking to qualify, limit or carve out from the nature of the definition of what constitutes “a contravention”.  Insofar as this submission is understood as meaning that section 91(b) does not assist in determining what constitutes a contravention, I agree.

69.  The Commission further submits that comparisons with Australian case law underline that section 91 is only concerned with remedies and does not define liability.  Section 91 is similar to section 75B[46] of the CCA, which is contained in Part VI of the CCA on “Enforcement and Remedies”.  Part VI of the CCA contains a similar scheme to Part 6 of the Ordinance and section 75B plays a similar definitional role as I explained in [59].  Section 75B has been subject to interpretation by the High Court of Australia in Yorke v Lucas[47].  In the case of section 75B(1)(a) the Court says this at page 668: “The nature of the prohibition imposed by s.52[48] is, however, governed by the terms in which it is created and the context in which it is found. Section 75B, on the other hand, in speaking of aiding, abetting, counselling or procuring, makes use of an existing concept drawn from the criminal law and unless the context requires otherwise, there is every reason to suppose that it was intended to carry with it the settled meaning which it already bore: cf. Barker v The Queen[49]”.  In my view this must be the case when considering section 91.  As I have explained in [62]–[64], section 91 is concerned with categories of inchoate offences.  I disagree with the Commission’s submission that this demonstrates section 91 is concerned with remedies only and not liability.  On the contrary it suggests that section 91 is concerned with the liability of a person who aids or abets a contravention by undertakings (other than the aider and abettor)  of a competition rule.

70.  The Commission submits that the Federal Court of Australia’s decision in Australian Competition and Consumer Commission v Yazaki Corporation[50] also demonstrates that a section worded in similar terms to section 6 is concerned with liability because it rejected an argument that the Australian equivalent of section 6 be interpreted by analogy with section 75B.  Again, I disagree.  The Federal Court of Australia considered the meaning of “give effect to” in section 45(2)(b) of the CCA in relation to allegations of primary contravention and whether it was necessary to prove knowledge of the cartel conduct.  It is correct that the Federal Court found[51] that section 75B does not assist in the interpretation of the term “give effect to” in the cartel provisions.  But the rejection of the argument does not suggest that section 75B or its equivalent in Hong Kong, section 91, only concerns remedies rather than establishes independent accessorial liability.

71.  Yazaki concerned two Japanese companies that entered into an unlawful cartel arrangement concerning the supply of wire harnesses for motor vehicles, with the bidding being undertaken by their wholly owned Australian subsidiaries in Australia contrary to section 45(2) of the CCA.  The questions that the Federal Court had to consider included whether one of the Australian subsidiaries “gave effect to” the contravening conduct within section 45(2)(b) of the CCA even though it lacked knowledge of the cartel.  It seems to me clear from the Federal Court’s reasoning that it proceeded on the basis that giving effect to an anti-competitive agreement was not the same as aiding and abetting one.  In [71] the Federal Court discussed what type of conduct constitutes giving effect to an agreement.  It said that “[O]f course in order for conduct to be said to ‘give effect to’ an agreement, it must be demonstrated sufficiently to have been actually undertaken pursuant to, in accordance with, or otherwise enacting, implementing or administering that agreement.”  The Federal Court did not suggest that conduct can fall within both section 45(2)(b) and section 75B, despite the similarity of the conduct it had described as (a)  conduct constituting to “give effect to” and (b)  conduct that constitutes “aids, abets …,” i.e. words which “are apt to refer to the actions of a person who is present at the time of the commission of an offence and takes some part by assisting or encouraging its commission.”[52].

72.  I would note that section 45(2)(b) and section 6 both use the term “give effect to”.  However, the Commission’s case has not been framed in the ONA as the Respondent’s giving effect to the Subject Arrangement.  The case pleaded in [99] of the ONA is that Gray Line and Tink Labs made and gave effect to the Subject Arrangement and the Respondents facilitated them to do so.  The same formulation appears in [103].  This suggests a recognition that facilitation is not the same, or not the same in the present case, as giving effect to the Subject Arrangement otherwise the ONA should have tracked the language of the relevant section of the Ordinance.  This invites the question: is facilitation not another word for what lawyers generally call aiding and abetting?  It is implicit in the Commission’s case that it is.

73.  Although the Commission argues that section 91 does not define liability, it contends that there is an overlap between the FCR and section 91.  The obvious example being that section 91(d) expressly applies to a party to a contravention of a competition rule, and, therefore, an undertaking which contravenes the FCR falls within section 91(d).  The Commission contends that section 91 expands the potential targets of remedies and ensures that all persons against whom remedies ought to be available are caught.  The Commission says that the fact that this may result in an undertaking being liable for both contravention of a competition rule and as an accessory is not problematic.  Claims against a respondent for contravention of a primary prohibition, and involvement as an accessory in the alternative, are recognised under the Securities and Futures Ordinance[53].  This is also the case in the criminal law context.  I was referred to HKSAR v Chan Kam Shing[54].  In [36] of Ribeiro PJ’s judgment he refers to the decision of the High Court of Australia in Clayton v The Queen[55], which expressly states that in some cases the accused may be guilty both as an aider and abettor, and as a participant in a joint criminal enterprise.  In [100] Ribeiro PJ concludes that the principles of accessorial and joint criminal enterprise liability provide overlapping bases for establishing the accused’s guilt.  Thus, submits the Commission, there is no legal policy that mandates a strict dichotomy between a primary prohibition and accessory liability.  It may be correct that there is no overarching legal policy that prevents the same facts constituting a contravention of a primary prohibition and an accessory liability, however, in my view both as a matter of common-sense and the application of the general principles of statutory interpretation that I have already explained, legislation should be interpreted on the basis that this is not what was intended unless the provisions clearly suggest otherwise.  The language of sections 6 and 91 does not.  The Commission relies on decisions of the CJEU, which, in order to fill a lacuna in the EU legislation, which has been filled in Hong Kong by inclusion in the Ordinance of section 91, interpret a similar provision to section 6 as extending to aiding and abetting a contravention.  This is not a sound basis for interpreting section 6 in a similar way when the Commission has section 91 available to it.  In my view section 91 is most sensibly understood as a section expressly included to deal with a situation, which is clearly not expressly dealt with by the language of section 6, in order to make the position clear and that in doing so the legislature intended that given the accessorial nature of the liabilities created by section 91 the necessary intent would need to be proved.

74.  In my opinion:

(1)  Section 91(d) is to be read in the way explained by the High Court of Australia in Yorke v Lucas[56], namely, that “party” is a reference to a party in the nature of a person who comes within sections 91(a), (b), (c) or (e).

(2)  Section 91 establishes liability for a person whose involvement in a contravention by undertakings pursuant to sections 6 and 21 falls within the established meanings of the sub-sections to section 91.

(3)  Section 91(b) establishes liability for aiding and abetting (and in that sense facilitating)  an undertaking contravening the FCR.

(4)  It would be anomalous for the Commission to be able to proceed at its election under section 6 in respect of involvement in a contravention that constitutes aiding and abetting and avoid having to prove to the criminal standard, as it would in proceedings brought under sections 92(1)(b) and 91(b), that the aider and/or abettor acted with both knowledge and intent[57].

(5)  The inclusion in the Ordinance of section 91 is a material difference between the Hong Kong statutory regime and the EU statutory regime.  The EU case law is, as a consequence, of limited assistance in determining how sections 6 and 91 are to be construed.

75.  As I have explained the Commission has not advanced an alternative case pursuant to section 91 and accepts that if I agree with the Respondents that a complaint of facilitation must be brought under section 91 rather than section 6, the proceedings should be dismissed, which I so order.  There are other issues, which in the light of this Judgment do not have to be decided.  However, as one issue (contravention by object)  also involves an important point of principle and in case my Judgment is appealed, as I assume is likely, I will address them.

Contravention by Object

76.  Section 6 prohibits the specified conduct “if the object or effect” of the conduct is anti-competitive. The two elements are disjunctive[58]. In the present case the Commission relies on the object limb.  The Commission contends that if the Tribunal is satisfied that the Subject Arrangement was made or given effect to and that its object was anti-competitive, it is not necessary for the Commission to prove that the Subject Arrangement’s effect was anti-competitive.  The Respondents dispute this.  I will start by explaining the Commission’s argument.

77.  The nature of an object infringement and how to identify it has been the subject of extensive consideration in the EU case law. As referred to and relied upon in W Hing[59], in the leading case of Groupement des Cartes Bancaires (CB)  v European Commission[60] the CJEU explains in [49]–[50] that certain types of coordination between undertakings by their nature exhibit a sufficient degree of harm to competition that there is no need to examine their effects.  In [51][61] the CJEU gives as an example price-fixing between competing undertakings:

“Consequently, it is established that certain collusive behaviour, such as that leading to horizontal price-fixing by cartels, may be considered so likely to have negative effects, in particular on price, quantity or quality of goods and services, that it may be considered redundant for the purposes of applying Article [101(1)  TFEU], to prove that they have actual effects on the market.”

78.  In order to assess whether conduct amounts to an agreement or concerted practice which may be characterised as an “object” infringement, the Commission acknowledges that regard must be had to its content, its objectives and the economic and legal context of which it forms part.  This does not, however, says the Commission, require any sort of effects analysis.  In the case of price-fixing the exercise is brief.  If the contents of the agreement or practice involve horizontal price fixing, that amounts to an object infringement.  Horizontal price-fixing is the paradigm example of an object infringement.  There are other forms of conduct which may require more consideration of the economic and legal context.  Cartes Bancaires is an example.  The arrangements in issue concerned agreements and practices of French banking institutions to achieve the interoperability of the systems for payment and withdrawal by bank cards involving certain pricing measures, which were alleged to be object restrictions.  Vertical arrangements, which do not involve direct competitors, but undertakings at different levels of the supply chain such as manufacturers and distributors, may require greater investigation of the legal and economic context.  However, argues the Commission, as the present case concerns price-fixing between competitors (facilitated by other undertakings)  these more detailed assessment considerations do not arise.

79.  The implication of this, say the Respondents, is that all agreements between undertakings to fix prices contravene section 6. I think this is to mischaracterise how the Commission puts its case.  As I understand it the Commission says that in the case of a horizontal price-fixing agreement or concerted practice by object it is not necessary to prove that the object is anti-competitive, because it is axiomatic that a price-fixing agreement or concerted practice, which involves price-fixing, has as its object the prevention, restriction or distortion of competition in Hong Kong.  The difference is subtle, but important.  What the Commission is saying is that in the case of a horizontal price-fixing agreement (and for brevity I shall just refer to ‘agreement’ rather than ‘agreement and concerted practice’)  the Tribunal should find that the “the object …. of the agreement ….. is to prevent, restrict or distort competition in Hong Kong ….” without requiring evidence to be adduced to prove that the object is anti-competitive. The difference between this and the Respondents’ interpretation of the Commission’s argument is important.  It requires an undertaking, which disputes the suggestion that an agreement has an anti-competitive object, to prove that the object is not anti-competitive.  That distinction having been identified, the Respondents’ critique is still relevant, namely, that it is inconsistent with the criminal standard of proof and the presumption of innocence, which apply in cases involving criminal charges, which as I have explained in [29] Lam J found, without objection from the Commission, that a case such as the present involves.  Consequently, Articles 10 and 11 of the Bill of Rights are engaged.  Article 11 is of particular relevance, because it provides that “everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to law.”  In [51] of Cartes Bancaire, which I have quoted earlier, the CJEU states that the need to prove that the object of a price-fixing cartel is anti-competitive “may be considered redundant”.  If by “redundant” the CJEU meant unnecessary, in my view this is wrong in the Hong Kong context.  If the Commission alleges that an agreement contravenes section 6 because an undertaking (a)  made or gave effect to an agreement; or (b)  engaged in a concerted practice, which had as its object the prevention, restriction or distortion of competition in Hong Kong necessarily one of the components of the contravention is that the object had an anti-competitive effect.  As the allegation constitutes a criminal charge for the reasons I have explained, it follows that it must be proved.  However, it seems to me clear on a closer reading of the authorities that is not what the CJEU meant.

80.  In [58] of Cartes Bancaires the CJEU states that “The concept of restriction of competition ‘by object’ can be applied only to certain types of coordination between undertakings which reveal a sufficient degree of harm to competition that it may be found that there is no need to examine their effects, otherwise the Commission would be exempted from the obligation to prove the actual effects on the market of agreements which are in no way established to be, by their very nature, harmful to the proper functioning of normal competition”.  In Gazdasagi Versenyhivatal v Budapest Bank Nyrt[62](Budapest Bank)  the CJEU says something very similar in [54]:

“Moreover, the concept of restriction of competition ‘by object’ must be interpreted restrictively. The concept of restriction of competition ‘by object’ can be applied only to certain types of coordination between undertakings which reveal a sufficient degree of harm to competition for it to be found that there is no need to examine their effects, as otherwise the Commission would be exempted from the obligation to prove the actual effects on the market of agreements which are in no way established to be, by their very nature, harmful to the proper functioning of competition. The fact that the types of agreement envisaged in art 101(1)  TFEU do not constitute an exhaustive list of prohibited collusion is, in that regards, irrelevant (see, to the effect, CB at [58] and the case law cited).”

81.  It seems to me that what the CJEU meant is that there will be certain types of cases in which it is so obvious that a horizontal agreement to fix prices between competitors is anti-competitive that in practice little, if any, evidence is required to prove it.  In terms of evidential doctrine Cartes Bancaires is to be understood as establishing that in certain types of object cases the anti-competitive effect is so obvious that it can be inferred.  Whether in Hong Kong such an inference can be drawn depends on whether the legal principles by reference to which the Court draws inferences in cases in which the criminal standard has to be met are satisfied.  I explained what those principles are in [32].  The Commission has not formulated its argument in this way, which makes assessment of whether it has done enough to justify the drawing of such an inference more difficult than might otherwise have been the case.

82.  The Respondents say that the following principles are established by Nutanix and are drawn largely from Cartes Bancaires:

(1)  An agreement or concerted practice which has the object of restricting competition is one that, by its nature, is harmful to competition: Nutanix [37(1)].

(2)  The essential test is whether the agreement or concerted practice reveals in itself a sufficient degree of harm to competition: Nutanix [384(2)].

(3)  In order to determine whether an agreement or concerted practice constitutes a restriction by object, regard must be had to the content of its provisions, its objectives and the economic and legal context of which it forms part: Nutanix [384(3)].

(4)  When determining that context, it is also necessary to take into consideration the nature of the goods or services affected, as well as the real conditions of the functioning and structure of the market or markets in question: Nutanix [384(3)].

(5)  Although the parties’ intention is not a necessary factor in determining whether an agreement or concerted practice is restrictive, there is nothing preventing that factor from being taken into account: Nutanix[384(4)].

(6)  As the courts have repeatedly emphasised, the notion of restriction by object must be interpreted “restrictively”: Nutanix [385(5)].

83.  The Respondents contend that it does not follow that if an agreement involves horizontal price-fixing the object is ipso jure established.  They say that this is made clear in [117] of Dole Food[63] in which the CJEU emphasises in determining whether a type of coordination between undertakings reveals sufficient harm to competition to be considered a restriction “by object”, regard must be had to its objectives and the economic and legal context of which it forms part and in determining that context it is necessary to take into consideration the nature of the goods or services affected, as well as the real conditions of the functioning and structure of the market or markets in question.  This was accepted in Nutanix: [384(3)][64].

84.  It is not in dispute that for an object case there must be a detailed examination of the nature of the agreement, which is separate from its effects.  The Respondents also referred me to [181] of Lexon (UK)  Limited v Competition and Markets Authority[65] in which the CAT was concerned with a concerted practice found by the Competition and Markets Authority to be an “infringement by object” within the meaning of Article 101 and Chapter I of the Competition Act 1998.  The CAT refers to the Opinion of AG Wahl in Cartes Bancaires with approval in which he states at [AG42] that even serious restrictions of competition, such as horizontal price fixing, need not inevitably be an infringement of competition if the parties hold only a tiny share of the market concerned[66]. Similarly, the CAT refers with approval in [184] to the Opinion of AG Bobek in Budapest Bank in which he states that there would be no justification for prohibiting an agreement which, despite belonging to a category which would normally be regarded as anti-competitive, was, because of some circumstances, clearly incapable of producing an anti-competitive effect.

85.  In [109]–[121] of W Hing (No 2) Lam J undertakes a detailed analysis of the EU case law, which considers or touches on the proper parameters of the investigation of whether the object of an agreement has an anti-competitive effect.  Lam J rejects what would appear from [109] to have been an argument that Hong Kong should not adopt an approach to “object” cases in which certain categories of agreement are accepted without evidence as having an anti-competitive effect.  However, it is apparent from [111] that Lam J has in mind a distinction between the requirement to prove an anti-competitive effect and an examination of the agreement to see whether it exhibits characteristics, which, to quote from [110] “are generally recognised to restrict competition by object.”  The latter always needs to be done, but it is a different exercise to an effects analysis.  The distinction is described by the English Court of Appeal in Ping Europe Ltd v Competition and Markets Authority[67] in [33] of Rose LJ’s judgment.  Rose LJ does so by reference to AG Wahl’s opinion[68] in Cartes Bancaires to which I have referred earlier in the previous paragraph.

“33. Having considered the Court’s case law, he [AG Wahl] described the importance of analysing the object of the agreement in the economic context in which it operates but also of clearly distinguishing that exercise from the examination of the actual or potential effects of the conduct of the undertakings concerned. He gave as one example of relevant economic context a situation where the parties to the agreement held only a tiny share of the relevant market. A consideration of context could either reinforce or neutralise the examination of the actual terms of the purported restrictive agreement. But that consideration could not lead to the classification as an object restriction of an agreement whose terms do not appear to be harmful to competition.

34. AG Wahl acknowledged that the case law of the Luxembourg courts may in the past have blurred the distinction between the factors relevant to an examination of the anti-competitive object on the one hand and an effects-based analysis on the other. He said that it was only when experience based on economic analysis shows that a restriction is consistently prohibited that it seems reasonable to penalise it directly for the sake of procedural economy. Thus:

‘56. Only conduct whose harmful nature is proven and easily identifiable, in the light of experience and economics, should therefore be regarded as a restriction of competition by object, and not agreements which, having regard to their context, have ambivalent effects on the market or which produce ancillary restrictive effects necessary for the pursuit of a main objective which does not restrict competition.’

93.  The case …. establishes that one must examine the economic and legal context of the operation of the clause before deciding whether it is an object restriction or not……”

86.  In my view [56] of AG Wahl’s opinion and [93] of Rose LJ’s judgment contain an accurate explanation of agreements which are properly treated as restrictions on competition by object.  Put succinctly, an agreement or concerted practice is anti-competitive by object if it falls within the type of agreement that prevents, restricts or distorts competition in Hong Kong.  Necessarily the relevant terms of the agreement have to be considered in determining this as does the current economic understanding of the anti-competitive effect of such an agreement.  However, what does not need to be considered is whether the agreement under consideration, despite coming within a category of agreement understood to be anti-competitive, has that effect.  Section 6 clearly provides that a contravention may arise because an agreement has either an anti-competitive object or an anti-competitive effect.  Once an anti-competitive object has been demonstrated it is not necessary to assess whether the agreement had an anti-competitive effect.

87.  What does this mean in practice in the Hong Kong context?  As I have explained the current position in Hong Kong is that proceedings brought before the Tribunal by the Commission fall within Article 11 of the Bill of Rights and each component must be proved to the criminal standard, i.e., beyond all reasonable doubt.  If the Commission contends that an agreement is a restriction on competition by object and an effects analysis is not required, it is inviting the Tribunal to draw an inference that the agreement is in the light of experience and well-understood economic analysis unambivalently anti-competitive.  Section 7(2) of the Ordinance expressly permits the Tribunal to draw an inference that the object of an agreement is anti-competitive.  However, unless the agreement is obviously anti-competitive the Tribunal cannot properly draw the inference, because as I have explained the authorities in Hong Kong are clear: an inference of a contravention can only be drawn if it is the only reasonable inference that can be drawn based on the facts found by the Tribunal: see [32].  The Commission should formulate its case mindful of the conditions that must be satisfied before an inference can be drawn.  I would note that it is always open to an undertaking to contest the drawing of the inference, if necessary, by adducing evidence.

Is the alleged Subject Arrangement anti-competitive by Object?

88.  The case pleaded in the ONA against Gray Line and Tink Labs is that they made an agreement controlling the prices of the tickets that were being sold by Gray Line and Tink Labs: [99].  It is implicit rather than expressly stated in [100]–[101] that the agreement was anti-competitive by object.  Paragraph 101 pleads that the Subject Arrangement constitutes a form of price-fixing between Gray Line and Tink Labs and its object was to prevent, restrict or distort competition by Gray Line and Tink Labs.  Although not expressly stated, it seems to me clear that what the Commission is asserting in the ONA is that the Subject Arrangement entered into by Gray Line and Tink Labs was a horizontal price-fixing agreement and thus anti-competitive by object. Assuming that the Subject Arrangement was made in my opinion it was anti-competitive as between Gray Line and Tink Labs because the Subject Arrangement purported to fix the prices they both charged customers rather than allow Link Tabs to charge less.  Plainly, as between Gray Line and Tink Labs the Subject Arrangement had as its object the prevention and/or restriction and/or distortion of competition in Hong Kong and I so find.

89.  In [87]–[88] of the Respondents’ Closing Submission they say this:

“87. ….It is very difficult to see why the Ordinance should be construed as condemning and penalising an agreement which, albeit of a type that is recognised as being generally harmful to competition, is in fact incapable of producing harmful effects …….

88. …. This proposition does not involve conducting an effects analysis in object cases ……………. It calls merely for a reality check to ensure that a given agreement, although of a type that experience shows is generally by its nature harmful to competition, is actually benign or even pro-competitive in its real-world context – for example, because the combined market share of the participants is too small to make any difference to competitive conditions.” (emphasis added)

90.  It seems to me that this test is satisfied in the present case without any further investigation and fairly obviously so.  At no point in their submissions do the Respondents suggest any reason for thinking otherwise.  The reference in [88] of the Respondents’ Closing Submissions to an arrangement being too small to make any difference to competitive conditions suggests that the Respondents have in mind it being necessary in some way for the Commission to demonstrate that the object of the Subject Arrangement had an anti-competitive effect on the market in which Gray Line and Tink Labs conduct business.  This seems to me to be wrong.  It is sufficient if the object of the arrangement is to prevent, restrict or distort competition between the parties to the arrangement.  The arrangement may have a broader effect on other market participants, but it is not necessary for it to do so.  It may be that it is an assumption, conscious or otherwise, that an arrangement must have some broader market effect that has led the Respondents to dispute that the Subject Arrangement has an anti-competitive object when it plainly does.

Were Gray Line and Tink Labs separate undertakings?

91.  The Subject Arrangement is pleaded in [99]–[101] of the ONA.  Paragraph 99 pleads that Gray Line and Tink Labs together with the hotels as facilitators made and gave effect to an agreement or engaged in a concerted practice to fix the price of tickets that were being sold by Gray Line and Tink Labs at the hotels.  Paragraph 34 of the Response of the Respondents denies [99] of the ONA.  It does so on the ground that Gray Line and Tink Labs were acting as distribution agents for the underlying attractions and transportation services.  The Respondents submissions suggest that Gray Line and Tink Labs were part of separate undertakings constituted by the operators of each of the attractions or tours for which they sold tickets.  For example, in the case of Gray Line and Ocean Park the Respondents argue that this is demonstrated by the following features of the distribution agreement between Gray Line and Ocean Park:

(1)  The relationship between Gray Line and Ocean Park is governed by a standard form contract;

(2)  Gray Line is allowed to return unsold expired daytime admission tickets and exchange them for tickets with extended validity dates;

(3)  As regards e-tickets, Gray Line does not maintain its own stock of tickets but instead pays a deposit to Ocean Park in advance, with the ticket price deducted from the deposit each time an e-ticket is issued by Gray Line;

(4)  There are no obligations on Gray Line’ part to invest in sales promotion; and

(5)  There are no obligations on Gray Line’s part to invest in equipment or training.

92.  This argument is entirely artificial.  As Lam J explains in [306]–[307] of W Hing (No 2)[69] in determining whether the entity or entities under consideration constitute a single undertaking as defined in section 2 the Tribunal asks “whether or not there is unity in the conduct of the relevant entities in the market”[70] and “whether third parties perceive the principal and agent as forming a single economic entity is a relevant factor”[71]. It is quite clear that both Gray Line and Tink Labs were independent travel services companies offering tickets and associated services to several tourist attractions and services in Hong Kong.  They were plainly separate economic entities from the attractions and services themselves, and the evidence is clearly consistent with this being how they would be perceived by both the attractions and tourists.

93.  The factual dispute in relation to the Subject Arrangement (which has not been disputed by either Gray Line or Tink Labs)  focuses on the Respondents’ involvement in the process by which the Commission contends Gray Line and Tink Labs reached the Subject Arrangement in relation to the Hotel.

Subject Arrangement

94.  It is common ground that the relevant applicable competition law principles, if section 6 applies to facilitation, can be found in the CJEU’s judgment in AC-Treuhand.  The CJEU summarises the finding of the European Commission in [9] of its judgment as follows: AC-Treuhand was “liable in that it played an essential and similar role in both infringements at issue by organising a number of meetings which it attended and in which it actively participated, collecting and supplying to the producers concerned data on sales on the relevant markets, offering to act as a moderator in the event of tensions between those producers and encouraging the latter to find compromises, for which it received remuneration.” The CJEU frames the issue for determination in these terms: “It is necessary to determine in the present case whether a consultancy firm may be held liable for infringement of art.81(1)  [i.e. Article 101(1)] EC where such a firm actively contributes, in full knowledge of the relevant facts, to the implementation and continuation of a cartel among producers active on a market that is separate from that on which the undertaking itself operates”[72].

95.  In [30] of AC-Treuhand[73] the CJEU says that to prove that an undertaking has contravened a conduct rule it must be proved that the undertaking intended to contribute by its own conduct to the common objectives pursued by all the participants and that it was aware of the actual conduct planned or put into effect by other undertakings in pursuit of those objectives.

96.  In their Closing Submissions the Respondents contend that in order to establish liability as a facilitator that is not active on the relevant market it must be shown that the facilitator:

(1)  Actively contributed to or actively participated in the infringement;

(2)  Played an essential role;

(3)  Intended to contribute by its own conduct to the common objectives pursued by all participants;

(4)  Had full knowledge of the facts; and

(5)  Was aware of the actual conduct planned or put into effect by other undertakings in pursuit of the same objectives, or that it could reasonably have foreseen it and that it was prepared to take the risk.

97.  The Respondents also submitted that although not an essential element, it was relevant to consider whether the third party had gained from the conduct in issue.  The Respondents did not elaborate on what form of gain was relevant.  Be that as it may, it seems to me that the identification of a benefit to an undertaking is mainly likely to be relevant in the assessment of whether or not other things necessary to support a finding of facilitation have been proved, such as the intention to contribute to the implementation of the agreement or concerted practice alleged to constitute a contravention of the FCR.

98.  In my view, what has to be proved in order to establish contravention by facilitation is the following:

(1)  The person was aware of the agreement or the concerted practice which was intended by the other participants to be implemented.

(2)  The person’s conduct must have contributed to the objective of the agreement or the concerted practice.  The contribution must be more than peripheral services that were unconnected with the obligations assumed by the principal participants and implementation of the restriction on competition[74].

(3)  The person intended to contribute by its conduct to the objective of the agreement or the concerted practice.

The evidence needs to be assessed by reference to these criteria.

Ad Hoc Nature of the Arrangement

99.  I accept the Commission’s case that the Subject Arrangement was entered into in respect of each of the hotels on an ad hoc basis and after lobbying by Gray Line with each hotel.  This is illustrated by Ronald Wu’s evidence in cross-examination in relation to the arrangement at the Panorama hotel.  The arrangement for the Panorama was not put in place as part of a coordinated process involving other hotels.  Ronald Wu was talking to the Panorama about Gray Line’s concerns about the handy devices introduced into the Panorama, which offered tickets at lower prices than those offered by Gray Line.  It was apparent from Ronald Wu’s evidence that at this time (roughly March to May 2016)  he was not aware of the company that operated the handy devices, but only the name of the device and its relevant functions.  As Mr Parker put it in a question to Ronald Wu about the Panorama: “ …there is a flow of information through Panorama between Gray Line and Handy…”.  There was clearly a concerted effort by Gray Line (which Gray Line has not disputed)  to get the hotels I referred to earlier to speak to Tink Labs.  Initially Gray Line wanted the ticket selling functions removed from the devices.  Ultimately it was agreed that Tink Labs would charge the same prices as Gray Line.

100.  This modus operandi is not controversial except in one important respect.  The Respondents contend that by the time HP8 was approached by Gray Line, Tink Labs had a plan whereby it would unilaterally take action to match Gray Line’s prices.  This does not seem to me to have been supported by the evidence of Agnes Poon.  She agreed in cross-examination that by the time Tink Labs was talking to HP8 about Gray Line’s complaints, Tink Labs’ management had agreed internally that the response to complaints passed on by the hotels was to price match.  However, it was clear in my view from her evidence that how Tink Labs would respond would depend on the approach of a hotel and it would take into account the hotels’ views.  This is what her evidence demonstrated had happened at HP8.

The Discussions with HP8

101.  Tink Labs and HP8 began to liaise over introducing the handy devices to the Hotel in March 2016.  Gray Line had either become aware of this, or at least thought it was likely to occur, by 12 May 2016, when Ronald Wu of Gray Line sent an email to Kenneth Chan of HP8 requesting that if handy devices were installed at the Hotel the ticket and tour functions should be disabled.  A subsequent email, which I deal with in more detail later, records Mr Chan raising the concerns in a call on 24 May 2016 with Kelvin Chong of Tink Labs.  According to an email dated 25 May 2016 from Eddie Wu to Michael Wu, Mr Chan agreed to ask Tink Labs to remove the ticket and tour functions from the handy devices.  It was Agnes Poon’s evidence that at a training session also on 25 May 2016 one of HP8’s staff asked for the ticketing function to be removed.

102.  In his witness statement Kenneth Chan effectively denies that he told Ronald Wu that he would contact Tink Labs or that he instructed, or was aware of any of his colleagues, instructing HP8’s staff to mention this to Tink Labs.  This is an appropriate point at which to explain my assessment of the witnesses, who gave evidence to the Tribunal.

103.  The following witness statements were produced by the Commission: Agnes Poon, Michael Wu, Ronald Wu and Eddie Wu.  The Respondents produced witness statements of Kenneth Chan and Cheng Man.  Michael Wu and Cheng Man were not required to attend for cross-examination.  Micheal Wu admitted the Subject Arrangement between the hotels for the purposes of the Kam Kwong proceedings. In cross-examination Ronald Wu said that Gray Line had not made an agreement with Tink Labs.  The arrangement involved Gray Line providing information and opinions to the hotels on which the hotels and Tink Labs acted.  I accept the Commission’s submission that nothing turns on Ronald Wu’s characterisation of what took place.  Whether or not the evidence proves an agreement or concerted practice within the meaning of section 6 of the Ordinance is a question for the Tribunal.

104.  Agnes Poon was a hospitality account manager at Tink Labs during the material period.  I described her role in [20].  She gave evidence in English.  I found her an intelligent and honest witness, who in my view was attempting to give accurate and fair answers to the questions put to her.  The same in my view cannot be said of Mr Chan.

105.  As I explained earlier in cross-examination Mr Chan told the Tribunal that he had never had contact with Gray Line before 12 May 2016 and that his witness statement was incorrect.  This was plainly inconsistent with Gray Line’s contemporaneous reports from April 2016 onwards, which record Mr Chan having regular meetings with Gray Line.  For example, Gray Line’s report dated April 2016 records detailed discussions about occupancy rates, the origin of groups of guests, staff shortage and the availability of portable WiFi routers.  There is no credible reason for thinking that these reports are substantially inaccurate and give a misleading impression of what was discussed.

106.  Kelvin Chong of Tink Labs sent an email on 24 May 2016 to various people at HP8 including Mr Chan referring to a call he had just had with Mr Chan expressly stating that he had been told that Mr Chan had raised concerns about the handy devices’ ticketing facility.  Mr Chan denied this in cross-examination.  His evidence not only sat uncomfortably with the contents of the email, but also Mr Chan’s own witness statement in which he says in [21] that he mentioned this concern to Kelvin Chong.

107.  On 25 May 2016 Eddie Wu of Gray Line sent an email to Michael and Ronald Wu about the handy devices.  He says in relation to HP8 that he had spoken to Mr Chan.  Mr Chan gave him detailed information about the arrangements that Tink Labs had made with HP8 in relation to the handy devices and he states that Mr Chan would “try his best to negotiate with Handy to remove the ticket and tour function if possible.” Mr Chan said in cross-examination that he had not told Eddie Wu this and he had no idea where he got this information from.  Again, there is no credible explanation for the contents of the email being materially inaccurate.

108.  In his record of interview Mr Chan told the Commission that he had had discussions at a meeting with Gray Line on 27 May 2016 about ticket prices.  In particular he said this: “And he had a concern, that is to say, there might be guests who had probably bought tickets at the counter of Gray Line, bought tickets at a published price, and when they got to their rooms, probably, if there was really a Handy phone in future and (they)  would see that the price was much lower than theirs, that might affect them, would complain again, and might probably also bring some complaints to the hotel.”  However, having confirmed that he had a meeting on 27 May 2016 with Gray Line, in answer to the question whether price differences between Gray Line and Tink Labs had been discussed at the meeting, he said in cross-examination, “No discussions concerning the prices of the tickets.” Mr Chan corrected his evidence when shown the record of interview.  I will quote the whole of the relevant exchange:

“Q. So what you were saying here was that at the 27 May meeting Gray Line explained the price differential issue to you, didn’t they?

A. Yes.

Q. And they explained very clearly why that price differential could give rise to problems for the hotel as well. Understood, Mr Chan?

A. Yes, understood.

Q. And those were the sorts of complaints as the front office manager you wanted to avoid, didn't you, Mr Chan?

A. Incorrect.

Q. You didn’t care if customers complained about differential ticket pricing, Mr Chan, are you telling the tribunal that?

A. Correct.

Q. You didn’t care if your customers complained. Are you really telling the tribunal that, Mr Chan?

A.  If they complained because of this matter then I would not care.”

109.  This evidence directly conflicts with his evidence in [27] of his witness statement in which he says:

“I recall that I then called Agnes Poon of Tink Labs between 27 and 30 May 2016 to inform her (a)  that HP8D had a Gray Line tour counter which sold theme park tickets and tour tickets and (b)  that Gray Line had informed me that apparently some other hotels had removed the ticket sales feature on their Handy Phones. I did so out of concern for the smooth running of HP8D. As a person responsible for the day-to-day operations of HP8D, the last thing I wanted was for there to be discord among the different service providers which ultimately could lead to inconvenience or a bad experience for our guests. I therefore queried whether Tink Labs could remove the tickets sales feature on HP8D’s Handy Phones. Agnes Poon responded that she had received calls from some other hotels saying that those hotels had both Handy Phones and Gray Line tour counter. Agnes Poon said she would report the situation to Tink Labs’ management and see how the matter could be addressed.”

110.  In my view when giving evidence in cross-examination Mr Chan was plainly trying to avoid agreeing that he had discussions with Gray Line and Tink Labs about prices and that he had been actively involved in negotiating an accommodation between Gray Line and Tink Labs.  As the above examples illustrate, he was ready to give answers, which in my view were clearly untrue.  I find him to have been a dishonest witness and where his evidence conflicts with the contemporaneous documents or plausible evidence of other witnesses I accept the contents of the contemporaneous documents and the evidence of other witnesses.  In addition to the above matters, I also reject his evidence in relation to the following matter.

111.  In cross-examination Mr Chan denied that Agnes Poon on 30 May 2016 suggested as a solution to Gray Line’s complaints that Tink Labs raise its prices to match those of Gray Line, although he had said this in his record of interview.  In cross-examination he also said that he had never discussed with Agnes Poon price-matching, which was also inconsistent with his record of interview.  He also disputed that when he checked Gray Line’s prices at its tour counter at the Hotel before sending them to Agnes Poon on 1 August 2016, this was deliberate, in the sense, as I understood it, of being a step in the implementation of the price matching arrangement, which resulted between Gray Line and, Tink Labs. Plainly, Mr Chan was checking the prices Tink Labs needed before sending them to Agnes Poon.  Mr Chan’s unwillingness to accept that he was consciously facilitating the arrangement is illustrative of his evidence in cross-examination being tailored to distance HP8 from involvement in its formulation and implementation.

Findings

112.  It seems to me quite clear from the contemporaneous documents and Agnes Poon’s evidence that HP8, and in particular Mr Chan, had a central and material role in an arrangement being made in relation to the Hotel that Tink Labs would adjust the prices it charged for tourist attractions and other services that could be purchased on the handy devices so that they matched those charged by Gray Line, i.e., the Subject Arrangement.  Both Gray Line and Tink Labs understood this.

113.  I accept Agnes Poon’s evidence that she did not know Gray Line’s standard prices or whether the prices varied between hotels at which Gray Line had a presence.  This is consistent with the documentation demonstrating that in the case of 5 of the 8 hotels Gray Line’s prices were sent to Tink Labs by those hotels.  The only hotels where a price list was not sent to Tink Labs were the Royal Hotels and ICGS.  For Royal Hotels, HP8 accepts that Gray Line’s price list was passed to Tink Labs.  In the case of ICGS, it confirmed to Tink Labs in an email that Gray Line’s tour counter was selling tickets at the normal published prices.  I accept the Commission’s submission that Tink Labs did not have any prior understanding or assumption that Gray Line’s prices at each hotel were and would in the future continue to be the prices published by the relevant tourist attractions and transportation services (“Published Prices”).

114.  It is not in dispute that Gray Line and Tink Labs did not have any direct communication about the Subject Arrangement.  Information and suggestions were passed between Gray Line and Tink Labs by HP8, largely through Mr Chan.

115.  On 30 May 2016 Ronald Wu sent Mr Chan an email noting that the handy devices offered tickets at prices different from the Published Prices.  The email contained a comparison of the prices.  The email stated that the handy devices offering tickets to tourist attractions and tours would affect the business at Gray Line’s tour counter and mentioned that a number of Gray Line’s partner hotels had asked for these features to be removed from the handy devices.  After receiving the email Mr Chan phoned Agnes Poon and asked her whether the ticketing function on the handy devices could be removed and she replied that it could not be done.  Agnes Poon explained to Mr Chan that she had received the same enquiry from other hotels.  She told Mr Chan that Tink Labs could adjust the prices on the handy devices, and this is how she had dealt with similar enquiries from the other hotels.  In cross-examination, Mr Chan said that he had said nothing in response to this proposal, because from the Hotel’s point of view, he was fine with the price-matching proposal.  Agnes Poon said she had told Mr Chan she would go back to her management to seek their approval to price-matching.  Mr Chan disputed this.  Little turns on it, but I prefer Agnes Poon’s evidence. As I have already explained where they diverge, I prefer Agnes Poon’s evidence to Mr Chan’s as long as it is plausible, which it clearly is as I would expect her to have to obtain approval from her management to a price matching arrangement.

116.  It seems to me a compelling inference that Mr Chan phoned Agnes Poon, because he understood Gray Line was unhappy about the adverse impact on its business of the handy devices.  He wanted to resolve Gray Line’s complaints and (as recorded in Eddie Wu’s email of 25 May 2016, which I accept is accurate)  he had told Gray Line that he would negotiate with Tink Labs. 

117.  On 21 July 2016, Ronald Wu sent a follow-up email to Mr Chan informing him that the response from other hotels to the pricing and liability issues was that either they had stopped tickets being sold on the handy devices or that the prices on the handy devices were adjusted to the Published Prices or in one case replacing the handy devices with pocket WiFi. Mr Chan said he did not see the email.  This seems unlikely, particularly as it is his own evidence that subsequently he searched for the prices in the email of 30 May 2016, which immediately precedes the email of 21 July 2016 in the chain of emails.  However, it seems to me that little turns on this.

118.  I agree with the Commission that there is no doubt that:

(1)  Gray Line had requested Mr Chan to take steps either to cause the handy devices to be removed from the Hotel or to remove the ticketing function.

(2)  Mr Chan knew that this was because Gray Line considered it unfair that the handy devices offered tickets at lower prices.

(3)  Gray Line told Mr Chan what Gray Line’s prices were.

(4)  Mr Chan knew that an alternative way of dealing with Gray Line’s concerns was to have the ticket prices on the handy devices adjusted to the Published Prices.

119.  It is apparent from the emails passing between Ronald and Michael Wu in the second half of July 2016 that they knew the handy devices were to be rolled out in the Hotel from 1 August 2016 and were concerned to resolve the pricing issue.  An email of 25 July 2016 from Ronald to Michael Wu records Ronald saying he would talk to Mr Chan about the pricing and liability issue again.

120.  On or about 1 August 2016 there was a call between Agnes Poon and Mr Chan during which Agnes Poon told Mr Chan that Tink Labs’ management was agreeable to adjusting the prices on the handy devices to match Gray Line’s prices, and she requested Mr Chan to provide her with Gray Line’s prices.  Agnes Poon says in [40] of her witness statement that during this conversation Mr Chan confirmed that HP8 accepted Tink Labs’ price-matching proposal.  Mr Chan did not mention this in his account of the conversation in his witness statement, [34], and in cross-examination he denied this and said that they had never discussed whether HP8 agreed to the price-matching arrangement. 

121.  After the conversation Mr Chan went to Gray Line’s tour counter in the Hotel and verified that its prices were more or less the same as those Gray Line had previously sent to him.  He then returned to his office, found an earlier email dated 30 May 2016 to which I have referred previously, from Ronald Wu with a list of prices and composed an email to Agnes Poon.  The email is dated 1 August 2016 and states “Refer to our discussion earlier, please assist us to adjust the selling price of theme park tickets to the published price as below, thanks”. This was a reference to the attached price table Mr Chan had copied and pasted from Ronald Wu’s email.

122.  It seems to me inherently likely given the way in which the communications that I have described developed and their purpose (1)  Agnes Poon would have told Mr Chan that Tink Labs’ management agreed to the price-matching arrangement and that (2)  Mr Chan indicated HP8’s acceptance. The reference in his email of 1 August 2016 to seeking Tink Labs’ assistance in adjusting ticket pricing is consistent with this.  As I have previously explained in my view Mr Chan was an unreliable witness when describing these kinds of events and I accept Agnes Poon’s evidence that Mr Chan told her that HP8 accepted the price-matching arrangement.  I reject the suggestion put to Agnes Poon in cross-examination that she had asked Mr Chan to include reference to HP8 seeking Tink Labs’ assistance to resolve the issues with Gray Line.  I find that Mr Chan did tell Agnes Poon that HP8 agreed to the price-matching proposal and that the reference in the email of 1 August 2016 to “please assist us” was not included at Agnes Poon’s request.

123.  The Commission submits that the following matters are clear from the evidence of the events leading up to and including 1 August 2016. First:

(1)  Mr Chan provided assistance to Agnes Poon to enable Tink Labs to match Gray Line’s prices, namely the details of what Gray Line’s prices were.  The fact that he deliberately made the effort personally to verify them himself shows clearly that even Mr Chan did not take for granted what Gray Line’s prices were, even from an email sent by Gray Line itself.

(2)  Mr Chan knew full well that this would result in Tink Labs matching Gray Line’s prices.

(3)  Mr Chan knew that Tink Labs’ price-matching would address Gray Line’s concerns, and thereby assist Gray Line.  This is clear from: (1)  Mr Chan’s own evidence about the 30 May 2016 call; and (2)  the 21 July 2016 email.

(4)  Mr Chan also knew that this would assist HP8, in that it would resolve the discord between Gray Line and Tink Labs and the potential complaints that customers might make about the price differentials.

124.  Second, as was made clear in cross-examination, there can also be no doubt that Agnes Poon did in fact want and need Mr Chan’s specific confirmation as to what Gray Line’s prices were at the Hotel.

125.  Third, in fact Mr Chan’s own version of events does not take the Respondents’ case further.

(1)  On Mr Chan’s version, he never told Agnes Poon that HP8 accepted Tink Labs’ proposal, and he only wrote the words “please assist us” to help Agnes Poon persuade her management to make the price adjustments.

(2)  In these circumstances, even if the 1 August 2016 email portrayed a false picture, Mr Chan was deliberately conniving with Agnes Poon to portray that false picture to Tink Labs’ management for the purpose of achieving the price-fixing arrangement.

(3)  Therefore, Mr Chan was still actively assisting Agnes Poon.

(4)  Furthermore, the only conceivable reason he would have done this is so as to address Gray Line’s concerns, resolve the discord between Gray Line and Tink Labs and address the general concerns regarding the price differentials.

126.  Fourth, the Tribunal should accept Agnes Poon’s version of events, i.e., that (1)  Mr Chan expressly said in the 1 August 2016 call that HP8 accepted Tink Labs’ proposal to price-match; and (2)  she did not ask him to draft the 1 August 2016 email to portray a false picture.

(1)  Given that price-matching was Tink Labs’ internal protocol, there was no reason for her to contrive a false picture to present to her management.  If Mr Chan was not agreeable, she would have simply reverted to her management to figure out a solution.  There is no evidence that Agnes Poon ever went back to her management.  The subsequent emails show that she immediately (6 minutes later)  instructed her colleagues to adjust the prices.

(2)  The Respondents’ reliance on Bradley Kirk’s cooperating individual statement to suggest some pattern of Agnes Poon inveigling hotels into misleading conduct is misplaced.  Mr Kirk was the COO of Harilela Hotels.  The emails which Mr Kirk referred to, which he was not involved in, record Agnes Poon responding to a request.  Gary Ngai’s email of 26 August 2016 requested the price changes, which Agnes Poon’s email of 29 August 2016 replied to with the words “…per your request.”.

(3)  In relation to the suggestion that Agnes Poon was trying to engineer a paper trial for action against Gray Line, her unchallenged evidence in cross-examination was that she had no idea of any such plan.

(4)  As to Mr Chan’s oral confirmation that HP8 accepted Tink Labs’ price matching proposal:

(a)  If the email was not contrived, then Mr Chan must have made a request for Agnes Poon to assist him in the preceding phone call.

(b)  It is inherently likely that Tink Labs would only have adjusted its prices if it had received Mr Chan’s confirmation.

(i)  Tink Labs had not unilaterally decided to match its prices with Gray Line for any other hotel.  The reason is explained in [41] of Agnes Poon’s witness statement:

“Since HP8D had accepted the price-matching proposal, the implied understanding was that HP8D would no longer insist on Tink Labs removing the ticketing function on the Handy Devices all together. This was indeed the case, as HP8D never requested Tink Labs to remove the ticketing function again. If Kenneth had not confirmed with me that HP8D had accepted the price-matching proposal, Tink Labs would never have proceeded with the price-matching.”

(ii)  Even if this was Agnes Poon’s own assumption, it is an entirely reasonable explanation of Tink Labs’ thinking.

(c)  Whilst Agnes Poon did not specifically recall this in cross-examination on Day 2, it is apparent that after having had her memory repeatedly refreshed by counsel for the Respondents on Day 3, she was able to recall that it did happen.

(d)  As to this not being mentioned in her cooperating individual statement, Agnes Poon tried but could not explain precisely why.  However, it is plain that she did remember it and that it was not false or contrived.

(4)  In any event, whether by oral confirmation or the 1 August 2016 email, it is clear that HP8 had “accepted” Agnes Poon’s solution to match prices.

127.  I agree with the Commission’s submissions.  It seems to me clear that Mr Chan acting on behalf of HP8 played a central role in addressing Gray Line’s complaints and facilitating the price-matching arrangement.  Events subsequent to the telephone call and email of 1 August 2016 are consistent with this conclusion.  Agnes Poon on the same day asked her colleague, Shui Leung to match the prices set out in the table.  Shui Leung confirmed this had been done and by an email date stamped 1:26 pm Agnes Poon told Mr Chan this.  On 3 August 2016, Eddie Wu had another discussion with Mr Chan, which Eddie Wu in his record of interview recalls as including Mr Chan telling him that there had been negotiations with Tink Labs to restore the original selling price of the theme park tickets.  Mr Chan denied this conversation and the Respondents objected to the Commission relying on this record and making this point.  In my view this objection is misconceived.  The records of interview were part of the evidence.  The Commission relies on it primarily because it is consistent with Agnes Poon’s evidence that Mr Chan agreed to the price-matching arrangement and as to how Eddie Wu knew about the arrangement by the time of his email of 12 August 2016, to which I refer in the next paragraph.  This is unobjectionable.

128.  On 12 August 2016 Eddie Wu reported in an email to Ronald Wu that in relation to HP8 “Tour has been removed, theme park ticket is selling original price.  HP8D request HK$2,500 deposited to using each Handy Phone.”  I agree with the Commission that it is a compelling inference that Eddie Wu was told this by Mr Chan.  Gray Line’s emails of 21 July 2016 (from Ronald Wu to Mr Chan), 23 and 25 July 2016 (between Ronald Wu and Eddie Wu)  evidence Gray Line’s concerns about the introduction of handy devices in the Hotel, which were consistent with their similar concerns about their introduction in other hotels.  After 1 August 2016 there is no record of any communications between Gray Line and HP8’s staff.  The implication is clear, namely, that Eddie Wu had been told by Mr Chan that the price-matching arrangement had been agreed and introduced.  However, Gray Line monitored the arrangement.

129.  On 26 September 2016, Eddie Wu told Michael Wu that he had confirmed the prices on the handy devices at the hotels, but a response from the Hotel was pending.

130.  On 29 September 2016:

(1)  At 12:15 pm, after a conversation between Eddie Wu and Mr Chan to the effect that the handy devices at some hotels had changed to the discounted rate, Eddie Wu asked Mr Chan to check whether the handy devices at the Hotel had changed their prices as well.

(2)  After receiving this email, Mr Chan went upstairs to a room to check on an handy device.

(3)  At 12:48 pm, Mr Chan replied stating: “Thank you for your e-mail. Having check the handy phone and confirmed they changed to the original ticket price, thanks.”

(4)  At 1:07 pm, Eddie Wu replied stating: “Many thanks for your help again, great[ly] appreciated.”

131.  It is clear that:

(1)  Mr Chan went upstairs to check the prices on the handy devices prices because he knew it was important to Gray Line.

(2)  These September 2016 emails, and Mr Chan’s conduct in relation to them, are obviously consistent with the conclusion that Mr Chan was helping Gray Line to monitor the price-fixing arrangement with Tink Labs that he had helped establish.

(3)  The suggestion that Mr Chan had no idea that there was a price-fixing arrangement between Gray Line and Tink Labs, and that Gray Line never believed that Mr Chan had such knowledge, has no reasonable basis.  It seems to me obvious that the opposite was true.

132.  Further, it is Agnes Poon’s evidence that sometime after August 2016, HP8 had informed her that the prices on the handy devices were discounted; Agnes Poon requested her colleagues to remove the discount; and Agnes Poon reported this back to HP8.  In cross-examination, Agnes Poon recalled that it had occurred, notwithstanding the schedule containing pricing information which was sent to the Commission on 24 August 2017 showing only 7 March 2016 as being a date on which Tink Labs changed the prices on the handy devices from those that it had been given by Mr Chan and which were the same as those used by Gray Line.

Is Facilitation Made Out on the Facts?

133.  On the assumption that facilitation constitutes a contravention of the FCR, does the evidence prove beyond all reasonable doubt that HP8 facilitated the Subject Arrangement?  In my view it clearly does.

134.  It is not in dispute that Gray Line and Tink Labs had no direct contact.  It is clear, however, that a price-matching arrangement was implemented in August 2016.  The evidence demonstrates that this was the result of HP8, through Mr Chan, receiving complaints and suggestions from Gray Line and mediating a resolution of them with Tink Labs.

135.  In order for facilitation to constitute an infringement of the FCR the evidence must prove beyond all reasonable doubt that the undertaking made or gave effect to an agreement or engaged in a concerted practice and the object (I am only in the present case concerned with the object)  of the agreement or the concerted practice is to prevent a restrict or distort competition in Hong Kong.  I am satisfied that the present case is properly treated as an infringement by object case.

136.  In [94]–[98] I have explained what has to be proved to establish contravention by facilitation.  As I say in [98], there are various components to this:

(1)  The person was aware of the agreement or the concerted practice which was intended by the other participants to be implemented.

(2)  The person’s conduct must have contributed to the objective of the agreement or the concerted practice.  The contribution must be more than peripheral services that were unconnected with the obligations assumed by the principal participants and implementation of the restriction on competition.

(3)  The undertaking intended to contribute by its conduct to the objective of the agreement or the concerted practice.

137.  The Commission invites the Tribunal to find that it has proved beyond all reasonable doubt that the Subject Arrangement at HP8 (the 2^nd Respondent)  and managed by HPM (the 3^rd Respondent)  including the Respondents’ facilitative conduct, existed and constituted a contravention of the FCR from August 2016 to 8 May 2017, which Tink Labs identified to the Commission in its letter dated 20 June 2017 as the date on which Tink Labs decided to withdraw from the Subject Arrangement at all the hotels. The Commission says that any earlier deviation by Tink Labs from the Published Prices used by Gray Line for selling tickets to tourist attractions and services was a form of cheating on the Subject Arrangement by Tink Labs rather than an indication that Tink Labs was no longer implementing the Subject Arrangement.  Alternatively, at the earliest Tink Labs withdrew on 7 March 2017, which is the date shown on the schedule containing pricing information sent to the Commission on 24 August 2017 as being the date on which Tink Labs changed the prices on the handy devices from those that it had been given by Mr Chan and which were the same as those used by Gray Line.

138.  The evidence that I have considered earlier in this Judgment clearly proves the following beyond all reasonable doubt.  First, that HP8 was aware of the Subject Arrangement.  Secondly, that HP8 contributed directly to the Subject Arrangement’s implementation as between Gray Line and Tink Labs.  Thirdly, that this was not inadvertent.  It was intentional. Fourthly, that the Subject Arrangement continued until at least 7 March 2017, when Tink Labs reduced its prices.  Although, Tink Labs told the Commission that it had decided no longer to implement the Subject Arrangement on 8 May 2017, it seems to me that given the clear evidence that Tink Labs lowered its prices in March 2017, I am satisfied that in relation to the Hotel the price-matching arrangement was in place until that date and not 8 May 2017.

139.  Most of the Respondents’ submissions in respect of the factual case have been addressed by virtue of my analysis and determination of factual matters in earlier parts of this Judgment.  There are a few, remaining points, which I will address here.

140.  The Respondents argue that they did not know that Gray Line and Tink Labs had already formed an anti-competitive price-fixing arrangement prior to their engagement with HP8 and could not have intended to facilitate such an arrangement.  The communications to which I have referred earlier demonstrate that Gray Line and Tink Labs had not come to an arrangement in relation to HP8 prior to Mr Chan passing on Gray Line’s concerns and requests for removal of the function on the handy devices that allowed guests to book tickets for tourist attractions and services.  There is nothing in the communications, which suggests that Gray Line or Tink Labs anticipated in advance of Gray Line’s complaint to HP8 that if Tink Labs introduced handy devices to the Hotel it would with little or no prompting either remove the ticketing function or offer tickets at the same price as Gray Line.  In the absence of anything of this sort it does not seem to me that the fact that the Subject Arrangement had already been introduced for other hotels makes a material difference to the character of what took place in relation to the Hotel.  The suggestion otherwise is entirely artificial as is the suggestion that Mr Chan did not intend to facilitate an arrangement between Gray Line and Tink Labs, which both companies could accept.  He plainly did.  His evidence to the contrary in cross-examination was in my view simply an attempt to escape from the obvious implication of the contemporaneous emails, which was that Gray Line approached him for his assistance in brokering an arrangement between Gray Line and Tink Labs, which meant that Gray Line did not face a competitor, which was undercutting its ticket prices.  Gray Line preferred the ticketing function to be removed altogether, but as the way matters transpired in June to August 2016 demonstrates it was prepared to accept a price-matching arrangement.  The fact that Agnes Poon accepted in cross-examination that she and members of Tink Labs’ management anticipated Gray Line would be concerned about competition from the introduction of handy devices into a new hotel and that any resulting complaints to hotel management might need to be resolved by price-matching does not alter what actually happened, which is clear from the contents of the emails as is Mr Chan’s involvement in it.  Similarly, what was or was not said at the meeting that took place between 24 and 27 May 2016 between Ronald Wu, Mr Chan and Elaine Wong (the Hotel’s financial controller)  does not alter the substance of what took place subsequently, for example, Mr Chan’s query during a telephone call with Agnes Poon following the meeting as to whether the ticketing function could be removed.

141.  It seems to me clear that Mr Chan acted on the basis that he had a role in resolving complaints from Gray Line and managing the controversy, which the introduction of handy devices created.  At no time did Mr Chan suggest that Gray Line and Tink Labs’ management should deal directly with each other or that HP8 was indifferent to Gray Line’s complaints or the issue more generally.  It is indisputable that both Gray Line and Tink Labs thought by August 2016 that an anti-competitive arrangement had been reached (price-matching)  and this was facilitated by Mr Chan.  The precise details of who said what to who and when they did so, does not alter the substance of what took place.  For the reasons I have already explained I accept Agnes Poon’s evidence of the substance of her communications in preference to Mr Chan’s when they conflict.  The substance of the Respondents’ attack on Agnes Poon’s characterisation of the discussions between her and Mr Chan and the contents of 1 August 2016 email, which resulted from them, is that Agnes Poon was (A)  discussing with Mr Chan a price-matching arrangement and (B)  asking for an email from him in language, that gave the misleading impression that Tink Labs was offering price-matching in response to HP8’s approaches to Tink Labs seeking to accommodate and address Gray Line’s complaints.  As the Respondents emphasise in their Closing Submissions by this time Tink Labs had implemented the Subject Arrangement with a number of other hotels.  It is difficult to see why against this background Agnes Poon would have thought it necessary to manipulate the communications with Mr Chan in the way submitted by the Respondents.  The two most likely responses from her to Mr Chan’s approaches would be either to tell Mr Chan that Tink Labs had dealt with similar complaints with other hotels and that it could be sorted out by price-matching at prices Tink Labs already knew, because of the Subject Arrangement, or to let HP8 make the running and respond accordingly, aiming if possible to offer tickets at Tink Labs’ preferred prices.  What I have found occurred is consistent with the second response.  The Respondents’ strained explanation of what took place makes less sense. 

Disposition

142.  For the reasons that I have given, I dismiss the Commission’s application.  If I had accepted the Commission’s case that section 6 covered facilitation, I would have found and made declarations that the Respondents had contravened section 6 from 1 August 2016 to 7 March 2017.  I make an order nisi that the Commission pays the Respondents’ costs of the proceedings with a certificate for two counsel, such costs to be taxed if not agreed.

	(Jonathan Harris)
	President of the Competition Tribunal

Mr Daniel Beard KC, Mr Derek Chan SC and Mr Julian Lam, instructed by Pinsent Masons, for the Applicant

Mr Abraham Chan SC and Mr Timothy Parker, instructed by Norton Rose Fulbright Hong Kong, for the 2^nd and 3^rd Respondents