JCI faces cartel allegations in Hong Kong

HONG KONG: Johnson Controls is to face a competition tribunal in relation to suspected cartel conduct involving the supply of over HK$3bn (US$383m) worth of air conditioning works in Hong Kong.

Hong Kong’s Competition Commission has commenced proceedings against Johnson Controls Hong Kong Ltd, York International (Northern Asia) Ltd and parent company Johnson Controls International plc, ATAL Building Services Engineering Ltd (ABS) and Lee Yui Ming, a former assistant service manager of Johnson Controls.

In what is a second set of proceedings concerning air conditioning works, the Competition Commission alleges that Johnson Controls and ABS, had engaged in serious anti-competitive conduct involving fixed prices, shared markets and/or rigged bids in relation to the supply of air-conditioning works in Hong Kong from 14 December 2015 to 24 June 2018. The Commission also alleges that Lee was a person involved in the contravention. 

In the first proceeding last year, ABS entered into a cooperation agreement with the Commission under the Commission’s Cooperation and Settlement Policy for Undertakings Engaged in Cartel Conduct. Under the terms of the cooperation agreement, ABS will admit liability in both the first and second proceedings and pay a fine of HK$150m (US$19m) together with the Commission’s investigation and legal costs. 

With respect to the proceedings against Johnson Controls and its former employee Lee, the Commission is seeking the imposition of pecuniary penalties and the recovery of the Commission’s investigation costs against Johnson Controls and the costs of the proceedings against both sets of respondents.