Consultation on Draft Leniency Policy for Undertakings Engaged in Cartel Conduct

Under s. 80 of the Competition Ordinance, Cap. 619 (the “Ordinance”), the Competition Commission (the “Commission”) may enter into a leniency agreement with a person that it will not bring or continue proceedings in the Competition Tribunal for a pecuniary penalty in exchange for the person’s co-operation in an investigation or in proceedings under the Ordinance.

On 23 September, the Commission published a draft leniency policy for undertakings engaged in cartel conduct (“Draft Policy”) for public consultation. The Draft Policy is said to be designed to provide clear incentives for cartel participants to cease participating in cartel conduct and to report that conduct to the Commission.

The Draft Policy consists of the following five key elements:

(i) leniency is only available for cartel conduct contravening the First Conduct Rule;

(ii) only an undertaking may apply for leniency;

(iii) leniency is only available to the first undertaking that reports the cartel conduct to the Commission and meets all the requirements for leniency;

(iv) if the Commission decides to offer leniency to the undertaking in question, it will enter into a leniency agreement with that undertaking; and

(v) the undertaking receiving leniency must be prepared to sign a statement of agreed facts admitting its participation in the cartel.

The Law Society has reviewed the Draft Policy and has prepared a written submission. A number of suggestions were made to improve the robustness, reliability and efficacy of the regime outlined in the Draft Policy. The full submission is available at http://www.hklawsoc.org.hk/pub_e/news/submissions/20151027.pdf

Jurisdictions: