On July 27, 2015 the Hong Kong Competition Commission and the Communications Authority released their finalized guidelines under Hong Kong’s Competition Ordinance (Cap. 619) (the Ordinance) in advance of the official commencement of the much anticipated cross-sector antitrust legislation in Hong Kong on December 14, 2015.
The Ordinance includes three key conduct rules. The first prohibits concerted practices and agreements which have the object or effect of restricting competition in Hong Kong, including serious cartel activity such as price-fixing, market-sharing, bid-rigging, and output restrictions. The second prohibits businesses with substantial market power from misusing such power by engaging in conduct which has the object or effect of restricting competition in Hong Kong. The third prohibits mergers amongst carrier licensees under Hong Kong’s Telecommunications Ordinance (Cap. 106) that have or are likely to have the effect of substantially lessening competition in the telecommunications sector (the merger rule).
The finalized guidelines elaborate on how the competition regulator intends to interpret and give effect to the three conduct rules under the Ordinance, and provides hypothetical examples and illustrations to assist businesses in understanding how the rules will be interpreted and applied. The guidelines also set out the procedural processes for the Competition Commission to handle complaints, conduct investigations, and consider applications on exclusions and exemptions from the Ordinance.
The Ordinance will not apply retrospectively to any agreements having effects or conduct which may occur before the law takes effect on December 14, 2015. However, any agreements or conduct which may continue or commence after the law comes into effect will be caught under the new regime and will be subject to enforcement action by the Competition Commission. Businesses will therefore need to carefully consider effective ways to terminate, discontinue or unwind any anti-competitive conduct which may otherwise continue past the commencement date of the legislation.
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|Yuet Ming Tham
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