Not a paper tiger – first criminal conviction for non-compliance with Hong Kong Competition Commission’s investigation powers

HKCC’s investigation powers

Under the Ordinance, the HKCC’s investigation powers include requiring any person to:

• produce documents and information (section 41);
• attend before the HKCC to answer questions relevant to its investigation (section 42);
• ·verify the truth of information by statutory declaration (section 43); and
• allow HKCC to enter and search relevant premises pursuant to a court warrant (section 50).

Notably, a contravention of the conduct rules under the Ordinance is not a criminal offence (albeit allegations currently being subject to a criminal standard of proof). However, failure to comply with the HKCC’s investigation powers above without reasonable excuse is a criminal offence, with a maximum fine of up to HK$1,000,000 and imprisonment for up to two years (section 52).

The same maximum penalties also apply to the following:

• a person, having been required to produce a document under the HKCC’s investigation powers, destroys, disposes of, falsifies or conceals that document (section 53);
• a person obstructs the HKCC’s search pursuant to a court warrant (section 54); and
• a person provides false or misleading information to the HKCC (section 55).

The conviction

In 2021, the HKCC commenced proceedings against two cleansing service companies and their three directors for suspected price-fixing. As part of the HKCC’s investigation, search warrants for company premises were issued. During these raids, it was discovered that an employee attempted to delete evidence from computers, including five documents and a number of computer links, which were potentially relevant to the HKCC’s investigation. The HKCC then referred the case to the Hong Kong Police for criminal investigation.

On 28 February 2025, the West Kowloon Magistrates’ Courts convicted the individual concerned for disposing of and concealing documents in contravention of section 53(1)(a) of the Ordinance and sentenced that individual to two months’ imprisonment.

Key takeaways

1. Obstruction has serious consequences

   Overall, the conviction sends a clear message to businesses that the HKCC is not just a paper tiger and that it takes non-compliance with its investigation powers seriously. The court’s decision to order imprisonment as opposed to a fine also serves as a strong precedent and deterrent against future attempts by individuals to interfere with the HKCC’s investigations. It signifies that individuals can be directly impacted as a result of their actions and non-compliance.

   This is also unlikely to be a one-off case. In 2024, it was reported that some individuals had refused to provide relevant information to the HKCC in its investigation into suspected bid-rigging in relation to building maintenance (which was jointly conducted with the Independent Commission Against Corruption). The HKCC indicated that it would follow up on this obstruction of its investigation powers.

2. Importance of seeking legal advice when investigated

   Once a company receives a request for documents or information or is subject to a search warrant from the HKCC, it should seek legal advice immediately on its obligations and the appropriate internal communications and document creation and disclosure protocol to adopt. This allows companies to have full clarity as to which documents need to be disclosed, which may be protected by privilege and how they should be handled when requested.   

3. Being prepared for dawn raids

Employees need to be made aware of the consequences of non-compliance with the HKCC’s investigation powers, especially in the context of dawn raids which are often unannounced inspections that catch employees by surprise. It is important to ensure that companies have clear dawn raid policies and training in place for employees to equip them for investigations.

While large organisations typically have appropriate dawn raid procedures in place, one often overlooked aspect is the possibility of dawn raids at employees’ domestic premises pursuant to a court warrant. In such instances, it is often more difficult for the employee and company to adhere to internal protocols such as ensuring officials are shadowed or taking notes.

If you would like further information on dawn raids, please get in touch with any of the contacts listed above.

Authored by PJ Kaur and Archita Maheshwari.