Competition Law at Hong Kong

Sure! Here’s a brief overview of Competition Law in Hong Kong:

Competition Law in Hong Kong

1. Legal Framework:

Hong Kong’s main competition law is the Competition Ordinance (Cap. 619).

The Ordinance was enacted in June 2012 and fully came into force on December 14, 2015.

It aims to prohibit anti-competitive conduct that harms the competitive process and ultimately consumers.

2. Objectives:

Promote fair competition in Hong Kong’s markets.

Prevent practices that restrict, distort, or prevent competition.

Enhance consumer welfare and economic efficiency.

3. Key Provisions:

First Conduct Rule: Prohibits agreements, concerted practices, or decisions by undertakings that have the object or effect of preventing, restricting, or distorting competition. This includes cartel activities like price-fixing, market sharing, and bid-rigging.

Second Conduct Rule: Prohibits abuse of a substantial degree of market power. This applies to dominant firms engaging in exclusionary or exploitative conduct.

Merger Rule: Requires prior notification and approval for mergers and acquisitions that meet certain turnover thresholds and might substantially lessen competition in Hong Kong. (Note: This rule is currently not yet in force and has been deferred.)

4. Enforcement:

The Competition Commission (HKCC) is the independent statutory body responsible for enforcement.

The Commission investigates suspected breaches and can bring proceedings in the Competition Tribunal.

The Tribunal handles cases, imposes penalties, and can grant remedies.

Fines can be substantial — up to 10% of worldwide turnover for each year of infringement.

5. Exemptions and Exceptions:

Some agreements or conduct may be exempted if they contribute to economic efficiency or consumer benefits that outweigh the anti-competitive effects.

Public policy considerations may also apply.

6. Impact on Businesses:

Businesses operating in Hong Kong must comply with the Ordinance to avoid penalties.

They should review agreements, market conduct, and merger plans.

Legal advice is often necessary for complex cases.

 

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