‘Hub-and-spoke’ bid-rigging and corporate attribution under Hong Kong Competition Law

‘Hub-and-spoke’ bid-rigging and corporate attribution under Hong Kong Competition Law Journal of Antitrust Enforcement, Kelvin H. F. Kwok, March 17, 2020, Volume 8, Issue 1

This article examines two important aspects of the Nutanix, the very first case brought and decided under the Hong Kong Competition Ordinance (Cap 619), which came into full effect back in 2015 as the first piece of cross-sector competition legislation in Hong Kong. Both aspects pertain to the ‘agreement’ element under the First Conduct Rule in the Ordinance. The first aspect is the analysis of a ‘hub-and-spoke’ arrangement; the second aspect is corporate attribution. It is argued, in respect of the first aspect, that the ‘hub-and-spoke’ bid-rigging arrangement in Nutanix need not be analysed in terms of multiple agreements between the ‘hub’ and the ‘spokes’. The preferred approach would be to analyse the arrangement as a single antitrust agreement based on a general, joint intention of bid-rigging shared amongst the ‘hub’ and the ‘spokes’. Significantly, it is not necessary for the ‘spokes’ to be aware of one another’s identity or existence for them to be considered as parties to the agreement, as an English contract law precedent would suggest. It is also argued, in respect of the second aspect, that, while the Hong Kong Competition Tribunal justifiably preferred a stricter standard of attribution for competition law liability—namely, the test of ‘sufficient connection’ between the employee’s behaviour and the employer undertaking—than tortious vicarious liability (ie the test of ‘close connection’), the ‘sufficient connection’ test suffers from the same problems of vagueness and indeterminacy as the tort law standard. The test would thus benefit from further judicial clarification and particularization.

Kelvin HF Kwok is associate professor at the University of Hong, deputy director of AIIFL and convenor of Consumer Law and Policy Programme.