The Hong Kong Competition Ordinance was implemented on December 14, 2015. The Hong Kong Competition Commission enforces the ordinance, together with the Competition Tribunal and the country’s higher courts. Here are the things you need to know about the ordinance.
The Implementing Bodies
The Commission’s aim is to educate people about compliance with the ordinance. Beyond promoting compliance, their duty also includes investigating contraventions and to take such matters before the Tribunal for determination.
The Tribunal’s main role is to hear and adjudicate competition cases. Private individuals or companies who have experienced loss or damage may only take an action to the Tribunal where a party has admitted to a contravention by means of a commitment or the Tribunal or any higher court has deemed a contravention to have taken place.
The Competition Commission is the principal authority in charge with the enforcement of the ordinance. It is important to note, however, that it has concurrent jurisdiction with the Communications Authority considering the anti-competitive conduct in the sectors of broadcasting and telecommunications.
The Major Prohibitions
The Ordinance is composed of three key “Competition Rules.” The first is the First Conduct Rule, which forbids agreements and planned practices that can restrict competition in Hong Kong. This prohibition targets price-fixing, bid rigging, resale price maintenance, as well as other anti-competitive conducts.
The Second Conduct Rule bans a business with significant degree of market power from abusing their authority by engaging in practices that restrict competition. Misconducts prohibited by this rule include predatory pricing, product tying and bundling, and margin squeeze among others.
The third is the Merger Rule. This rule prohibits a merger involving a carrier license from the Telecommunications Ordinance that may restrict competition. A merge of two competitors with 40% combined market share, for instance, is seen as something that could promote competition issues.
Learn more by consulting with an expert in competition law in Hong Kong.
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