19 August, 2015
The Hong Kong government yesterday announced its intention to bring Hong Kong's new cross-sector competition regime into force on 14 December 2015[1].
Although many businesses in Hong Kong are already reviewing their activities to ensure compliance with the new law, this announcement is a final reminder to do so. The law does not include a grace period: businesses are subject to the law from the commencement date. Moreover, the Competition Commission, responsible for investigating and taking prosecutions under the new law will be permitted to exercise its full enforcement powers (including dawn raids) from the commencement date. The Competition Tribunal, responsible for hearing and deciding cases, will also be operational from that point.
Various instruments were today gazetted[2] that are necessary to bring the competition law regime into effect, including commencement notices in respect of both the Competition Ordinance itself, as well as the Tribunal Rules.
The commencement notices and other instruments such as the fees regulations will be put before Hong Kong’s Legislative Council for vetting on 14 October 2015, when it returns from its summer recess. The vetting process may or may not lead to delays in the Government’s proposed commencement date.
The Competition Commission must still take the following steps before the Ordinance comes into force, and has promised to do so in the "coming months":
| Publish its Final Guidelines |
Draft substantive/procedural guidance as to how the Commission will enforce the Ordinance; these were first published for consultation in October 2014, with revised drafts subject to a further, more limited, consultation exercise in March this year.
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| Publish its Leniency Policy | Leniency programmes (which offer either full or partial immunity to businesses which disclose the existence of anticompetitive behaviour) have been a hugely successful driver of enforcement in many jurisdictions. The Commission's approach towards leniency may prove equally important to the early years of competition enforcement in Hong Kong. |
| Publish Enforcement priorities | With considerable uncertainty still remaining as to how the Commission will enforce the Ordinance (and, to date, no willingness on the part of the Commission to consider block exemptions for key industries in Hong Kong) businesses and their advisors will be hoping the Commission's promised guidance on its enforcement priorities will provide further clarity. |
For further information, please contact:
David Fleming, Partner, Baker & McKenzie
david.fleming@bakermckenzie.com
