2016年3月18日 金曜日

Competition Law in Hong Kong

18th March 2016          
Katty Tsang

New Competition Ordinance (Cap. 619) came into effect on 14th December 2015.  I would like to introduce about this new development in Hong Kong with you.

The Ordinance and Regulations
 Competition Ordinance (Cap. 619)
 Competition (Application of Provision) Regulation (Cap. 619A)
 Competition (Disapplication of Provisions) Regulation (Cap. 619B)
 Competition (Turnover) Regulation (Cap. 619C)
 Competition Tribunal Rules (Cap. 619D)
 Competition Tribunal Fees Rules (Cap. 619E)
 Competition Tribunal Suitors' Funds Rules (Cap. 619F)
 Competition (Fees) Regulation (Cap. 619G)

Highlights of the Competition Ordinance
1. To promote competition.
2. To prohibit any activities and/or conducts that prevents, restricts or distorts competition in Hong Kong.
3. To prohibit three types of anti-competition conducts: 
(a) "The First Conduct Rule"
Prohibit anti-competitive agreements, concerted practices and decisions.
(b) "The Second Conduct Rule"
Prohibit any entities with substantial market power to abuse their powers and engage in any act or conduct that amounts to anti-competition.
(c) "The Third Conduct Rule"
Prohibit mergers among carrier licensees under the Telecommunications Ordinances (Cap. 106) that would substantially lessen competition in the telecommunications section in Hong Kong.
4. The Leniency Policy
Since investigation of anti-competition cases could be difficult, the Ordinance provides Competition Commission the power to decide whether to enter into any "leniency agreement" with any person who agrees to cooperate with the Commission in the investigation or in the proceedings; in exchange this person shall be immune from being prosecuted or from penalties, subject to the terms and conditions of the leniency agreement.
5. If a company or a director/ officer of a company carried out any activity which is in contravention of any rules under the Competition Ordinance, they will be subject to penalties.
Examples of anti-competition activities:
 Competitors entering into cartel agreement, group boycott agreement.
 Competitors exchanging cost-sensitive information.
 Competitors agreeing on price-related arrangements such as discounts.
 Competitors allocating different markets by territory or by type of customers.
 Competitors agreeing on engaging into manipulating acts during a tender.
 Competitors agreeing to limit production or sales output to affect prices.
 Company with substantial market power offering exclusive dealing or conditional rebate, which in effect will lock out other competitors in the market.

Penalties in case of Contravention
Cases will be investigated by the Competition Commission and brought to Competition Tribunal for proceedings.  Generally, the followings are the available penalties that can be imposed against the subject company, director(s) and/or officer(s):

1. Maximum of 10% of the group company's turnover (gross revenue) in Hong Kong for a single contravention of the Ordinance.
2. Personal liability against director and/or officers:
(a) Payment of damages;
(b) Pecuniary penalties;
(c) Restitution orders;
(d) Prohibitory or mandatory injunctions;
(e) Other orders under Schedule 3 of the Competition Ordinance;
(f) Disqualification order (up to 5 years) and other similar orders.
3. Follow-on action by the person who suffered loss and damages due to the contravention of conduct rule by the defendant.
Time limitation for bringing a Follow-on Action:
Generally, three years from the date of any decision made by the Competition Tribunal or the date that the said decision becomes final and conclusive, whichever is later.

This article is for reference purpose only and does not intend to provide any advice.  If you need legal advice for your actual case, please seek legal advice from a qualified attorney of your choice.

投稿者 Kuribayashi Sogo Law Office



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