On November 19, 2015, the Competition Commission of Hong Kong (CCHK) published its enforcement policy (the Policy) to provide further guidance on how the CCHK will prioritize cases when carrying out its functions under the Competition Ordinance (the Ordinance). The Ordinance will come into full effect on December 14, 2015. We summarize below the Policy’s highlights.
Prioritization and Exercise of Discretion
The CCHK will consider three key areas (in addition to the specific facts of the case) when deciding how to prioritize the investigation of cases: (a) encouraging compliance, (b) the severity of the conduct, and (c) imposing effective and appropriate remedies.
(a) Encouraging Compliance
The CCHK plans to focus its resources on encouraging compliance with the Ordinance in the Hong Kong economy as a whole rather than focusing on specific sectors, and will prioritize investigations into three types of conduct:
- cartel conduct, including price fixing, market sharing, output restriction and bid rigging;
- other agreements contravening the First Conduct Rule (prohibiting anticompetitive agreements) causing significant harm to competition in Hong Kong; and
- abuse of substantial market power involving exclusionary behavior by incumbents.
The CCHK’s enforcement focus will not be limited to the conduct of undertakings. It may also include actions against associations of undertakings and/or individual officers and directors of undertakings.
(b) The Severity of the Conduct
In determining how to resolve individual cases where the CCHK believes the Ordinance has been contravened, it will also consider the following severity factors:
- whether the conduct demonstrates a blatant disregard for the law;
- the deliberateness of the conduct;
- whether the conduct involves any of the senior management;
- whether the person engaging in such conduct has any history of contravention; and
- whether the person engaging in such conduct has been given prior warnings in relation to the conduct but has failed to change such conduct.
(c) Imposing Effective and Appropriate Remedies
Although the CCHK has a range of enforcement responses at its disposal, it generally prefers remedies aimed at stopping the unlawful conduct, undoing the harm caused and imposing sufficient economic sanctions to encourage compliance with the Ordinance, among other goals.
Overall, the Policy broadly aligns with the enforcement priorities in other jurisdictions and is helpful in indicating what those doing business in Hong Kong may expect for the future.
If you have any questions regarding this Sidley Update, please contact the Sidley lawyer with whom you usually work, or
Yuet Ming Tham
Partner
yuetming.tham@sidley.com
+65 6230 3969
+852 2509 7645
Sidley Antitrust/Competition Practice
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