The Hong Kong Competition Commission (the Commission) recently announced on 28 February 2025 that it has secured its first criminal conviction for non-compliance with its investigatory powers under the Competition Ordinance (Cap. 619) (the Ordinance).

The case began with a complaint in December 2017 concerning a suspected price-fixing cartel among cleaning service companies. During the execution of a search warrant at the offices of one of the companies involved, an individual, who is an employee of the company, attempted to delete several documents and links that were potentially relevant to the Commission's investigation.

Her actions constituted a contravention of section 53(1)(a) of the Ordinance, leading to a referral by the Commission to the Police for criminal investigation. This section prohibits the destruction, falsification or concealment of documents required by the Commission during an investigation. Upon conviction, the maximum penalties include a fine of up to HK$1 million and imprisonment for up to two years. In this case, the individual was prosecuted and, upon conviction, was sentenced to imprisonment for two months.

This was the first criminal prosecution and conviction of an individual for non-compliance with the Commission's investigatory powers under the Ordinance, demonstrating the Commission's resolve to flex its regulatory muscles and punish those who attempt to obstruct its investigations. The judiciary's decision in this case also sends a strong message on the importance of complying with the regulator's investigatory powers.

Companies must be prepared for surprise "dawn raids" by regulators like the Commission, and must have in place protocols and procedures for dealing with regulators. Employees must be aware that blindly following instructions from their superiors to destroy evidence or obstruct a regulator's investigatory powers could lead to criminal prosecution and even imprisonment.