3 August, 2015
The Commencement Notice for the Competition Ordinance (Cap 619), which was gazetted on 17 July 2015, has appointed 14 December 2015 as the date for that ordinance to be fully commenced. It will be tabled before the Legislative Council for negative vetting in October 2015.
The Competition Ordinance was enacted on 14 June 2012 to provide a legal framework to tackle anti- competitive conduct in all sectors, and since then the Government has taken a phased approach to put this legislation into place in order to allow the public and business sectors to familiarise themselves with the new legal requirements. As part of this phased approach, the Competition Commission and the Communications Authority (which has jurisdiction under the Competition Ordinance to enforce competition provisions in respect of the conduct of telecommunications and broadcasting licensees) have been put in place since 2013, and a set of six Guidelines were released which is pending finalisation.
The Competition Ordinance prohibits three types of anti-competitive behaviour:
-
the First Conduct Rule prohibits anti-competitive agreements and concerted practices by businesses, including horizontal agreements between competitors (such as cartels) and vertical agreements (such as resale price maintenance in a distribution agreement);
-
the Second Conduct Rule prohibits businesses with a "substantial degree of market power" from abusing that power by acting anti-competitively. Examples of potentially abusive conduct include predatory pricing, refusal to deal and exclusivity arrangements; and
-
the Merger Rule prohibits mergers which have or are likely to have the effect of substantially lessening competition in Hong Kong. Unlike merger control regimes in other jurisdictions, the Merger Rule applies only to mergers involving a telecommunications carrier licence.
For further information, please contact:
Jamie Barr, Partner, Hogan Lovells
jamie.barr@hoganlovells.com
Tim Fletcher, Partner, Hogan Lovells
tim.fletcher@hoganlovells.com
Terence Lau, Partner, Hogan Lovells
terence.lau@hoganlovells.com
Mark Parsons, Partner, Hogan Lovells
mark.parsons@hoganlovells.com
Nelson Tang, Partner, Hogan Lovells
nelson.tang@hoganlovells.com
Thomas Tarala, Partner, Hogan Lovells
thomas.tarala@hoganlovells.com
Steven Tran, Partner, Hogan Lovells
steven.tran@hoganlovells.com
