Things To Watch Out For

The Hong Kong Competition Commission appears to have been one of the major beneficiaries of the government’s budget for the fiscal year 2019-20. Reports suggest that for the current fiscal year the Commission will receive approximately HK$156 million of taxpayers’ money – an apparent 17 percent increase to its revised allocation for 2018-19. This is in addition to significant one-off funding support for the Commission’s litigation costs.

For some a question arises as to what the Hong Kong public and taxpayers are getting for their money since the Competition Ordinance came into force in December 2015.

  • At the time of writing, judgment is awaited in the first two cases in which allegations of breach of the first conduct rule (anti-competitive agreements) have been raised by the Competition Commission against various corporate entities. These two cases have given rise to a number of interlocutory decisions so far. Of particular interest will be the Competition Tribunal’s ruling on what is the appropriate standard of proof (namely, a civil or criminal standard).
  • A third case is proceeding before the Competition Tribunal and also concerns alleged breaches of the first conduct rule. In this case enforcement action has been taken against two individuals, in addition to three companies. In common with other regulatory trends, the Competition Commission has shifted its investigatory focus towards individuals.
  • One can also expect more regulatory cooperation between regulators in Hong Kong; for example, the Consumer Council, the Privacy Commissioner and the Competition Commission. This follows trends in other jurisdictions. Also expect more cooperation between different competition regulators from different jurisdictions; particularly, in south-east Asia and across the boundary with the Mainland.
  • The Competition Commission is thought to be reviewing its current leniency policy for corporate entities alleged to be involved in cartel activity. Many consider that the current leniency policy does not do enough to encourage companies to self-report because (as things stand) only a first “whistleblower” qualifies for leniency and the prospect of civil liability to third parties remains. Given its increased regulatory focus on the behaviour of individuals, it is no surprise to hear of reports that the Commission is formulating a leniency policy for individuals.
  • The Competition Commission is also thought to have a separate cooperation and settlement policy in the making. If true, this will be a welcome development for many. Negotiation, settlement, proportionate reliefs for cooperation and more transparency on recommended fines have much going for them in the local circumstances of Hong Kong.

Editorial Note: On 29 April 2019, the Competition Commission published its “Cooperation and Settlement Policy for Undertakings Engaged in Cartel Conduct”.

Jurisdictions: 

Regulatory & Compliance