What You Need To Know About Hong Kong Competition Law (Part 5) - Investigation And Enforcement

Author:Mr Simon Berry, Alec J. Burnside, Viola Jing, Michael Liu, Jane Ng and Charles F. (Rick) Rule
Profession:Cadwalader, Wickersham & Taft LLP
 
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The implementation of the new Competition Ordinance (Chapter 619 of the Laws of Hong Kong) (the Competition Ordinance) on 14 December 2015 will mark the first time that Hong Kong has a general and cross-sector competition law.

Background

The Competition Ordinance was enacted on 14 June 2012 as a general and cross-sector competition law to curb anti-competitive conduct, and will come into full effect on 14 December 2015. In this issue, we will discuss the investigation and enforcement powers of the competition authorities in Hong Kong.

Who is in charge?

The Competition Ordinance provides for judicial enforcement through the Competition Commission and the Competition Tribunal. The Competition Commission and the Communications Authority1 are the investigation authorities responsible for and tasked with, inter alia, investigating competition-related complaints and bringing enforcement actions before the Competition Tribunal in respect of anti-competitive conduct, whereas the Competition Tribunal is responsible for adjudicating competition cases brought by the Competition Commission, private actions, as well as reviews of determinations of the Competition Commission. Any appeals in relation to decisions of the Competition Tribunal on competition matters will be referred to the Court of Appeal and/or the Court of Final Appeal.

Typical phases of investigation

The Competition Commission may launch an investigation on an alleged infringement of the Competition Rules (i.e., the First Conduct Rule, the Second Conduct Rule and/or the Merger Rule) either: (i) on its own initiative; or (ii) where information about a possible infringement is provided to the Competition Commission by another party. The sources of such information may include:

complaints or queries made by the public; the Competition Commission's own research and market intelligence gathering; referrals by the Government, the courts or other statutory bodies or authorities; and whistle-blowing by a cartel member or a former employee. The Competition Commission will generally carry out the investigation in two phases:

initial assessment phase; and investigation phase. Phase 1 - Initial Assessment Phase

During this phase, the Competition Commission does not start with a fixed view on whether a contravention of the Competition Rules has taken place. In determining whether there is reasonable cause to suspect an infringement and whether the matter warrants further investigation, it may...

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