Hu Zhaoying, the former chairman of the Travel Industry Council, and his subsidiary Jin Lun Travel Co., Ltd. were accused of being dissatisfied with the low bids from their peers when they sold tickets for tourist attractions and train tickets in hotels. They complained to the hotel and put pressure on them.
The Competition Commission said the move violated the Competition Ordinance.
The Competition Commission today (20th) filed a complaint with the Competition Tribunal against the relevant companies, and revealed that it had reached an agreement with some of the defendants.
The Competition Commission revealed today that the committee requested that Hu’s directorship be disqualified for three years, while Jin Lun was fined 4.17 million yuan, and the Seaview Grand Hotel involved in the case was also fined 1.6 million yuan.
Applicant Competition Committee, 6 defendants: Kam Lun Travel Services Limited, Harbour Plaza 8 Degrees Limited and Harbour Plaza Hotel Management Limited (owner and operator of Harbour Plaza 8 Degrees), Prudential Hotel (BVI) Limited (Heng Fung) Hotel owner and operator), Dehou Investments Limited (owner and operator of Seaview Grand Fook), and Hu Zhaoying, managing director of Jin Lun.
Hu Zhaoying, the managing director of Jin Lun Travel Co., Ltd., has reached an agreement with the Competition Commission. The parties now request the tribunal to issue an order to disqualify Hu from the directorship for three years.
(Data map/Photo by Zhang Haowei)
Involving tickets for Ocean Park and Disney
The complaint alleges that Jinlun has counters in several hotels, including Hengfeng Hotel, Harbour Plaza 8 Degrees, Marco Polo and Royal Plaza Hotel, etc., selling tickets and ticket prices for tourist attractions, including Ocean Park. , Hong Kong Disneyland, etc.
Another travel company, Tink Labs, has also had handy mobile phones in hotel rooms since 2015, allowing hotel customers to order tickets and train tickets.
Complaints to hotels and pressure on Tink Labs for low fares
Since the tickets and bus tickets sold by Tink Labs were lower than those of Jinlun, Hu Zhaoying repeatedly instructed Jinlun’s employees to complain to these hotels, saying that the price difference between Tink Labs and Jinlun would lead to customer complaints.
Jin Lun even pointed out in an email that Tink Labs' practices affected Jin Lun's business.
When Hu met with the hotel staff, he also complained that Tink Labs was selling tickets and train tickets at a lower price.
Tink Labs finally agrees to price increase
After repeated contact with Jinlun, Tink Labs and the hotel, Tink Labs agreed to increase the price. Jinlun will also provide the hotel with the price list of tickets and train tickets. It is expected that the hotel will forward the price list to Tink Labs.
Breach of the First Conduct Rule of the Competition Ordinance
The applicant argued that the agreement between Jin Lun and Tink Labs between 2016 and 2017 constituted a price-fixing conspiracy and violated the "first conduct rule" of the Competition Ordinance.
The Commission issued violation notices to a number of hotels and a travel counter operator last year.
The Commission is now asking the Competition Tribunal to rule on the defendant's breach of the "First Conduct Rule".
The filing revealed that an agreement has been reached with some of the defendants, and the Tribunal is now required to order the relevant defendants to pay a fine and to issue a disqualification order to Hu Zhaoying.
The competition committee released a document to reveal the content of the agreement
The Commission issued a press release today, revealing that Hu Zhaoying, his subsidiary Jin Lun, and Grand Harbour Hotel agreed to cooperate with the Commission to terminate the anti-competitive behavior.
The two parties have reached a cooperation agreement to jointly apply to the Competition Tribunal for an order to handle this lawsuit. The relevant orders include:
1. Declare that all co-respondents have violated the "First Conduct Rule" or are involved in breaching the Code
2. Fine Jin Lun 4.177 million yuan and Seaview Karfook 1.6 million yuan
3. Collect the Commission's Investigation costs and costs
4. Disqualification of directorship order against Hu Zhaoying for a period of 3 years
Case number: CETA1/2022
Hu Zhaoying, the former chairman of the Tourism Council, was fined 4.17 million for the price of Jin Lun Travel. He was fined and charged with conspiring to fix the price of the two cleaning contractors. There is a reasonable doubt to support that an investigation has been launched. The two cleaning companies have the same error in their bids for violating the competition law.
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