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Hong Kong competition laws come into force

The Hong Kong competition ordinance came into full effect on 14 December.17 Dec 2015

The full implementation of the ordinance aims to curb anti-competitive behaviour and bring the benefits of a level-playing field to Hong Kong consumers, businesses and the wider economy, the Competition Commission said.

The Hong Kong government has introduced the competition regulations in stages since the enactment of the Ordinance in 2012 and the subsequent establishment of the Hong Kong Competition Commission and Competition Tribunal in 2013.

Now that the ordinance is fully in place, the Commission is ready to accept applications from businesses to confirm whether certain conduct or arrangements are exempt or excluded from the ordinance, it said.

Most agreements will only be covered by the law if the combined turnover of the organisations involved comes to more than HK$200 million (US$26 million). If an organisation is seen as having "substantial market power", the turnover threshold is HK$40 million.

The Competition Commission also signed a memorandum of understanding with the Hong Kong Communications Authority this week, agreeing to a "consistent interpretation and application" of the ordinance and that the Communications Authority will take the lead role in any competition issues in the broadcasting and telecommunications sectors.

Anna Wu Hung-yuk, chairperson of the Commission, said: "Today is a significant day for Hong Kong as the full commencement of the competition ordinance marks an important step forward for our economy. With the Commission’s advocacy effort since its establishment, many businesses are making genuine efforts to understand and comply with the new law. In time, I am confident that the full benefits of the Ordinance and its potential to enhance Hong Kong’s overall economy will be felt in all aspects of our daily lives."

Stanley Wong, chief executive of the Commission, said: "Hong Kong is finally joining over 120 jurisdictions around the world with a cross-sector competition law coming to life today. The Commission is committed to using a mix of advocacy and enforcement actions to achieve the goal of the Ordinance."

Competition expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com said: "The Commission has issued helpful guidance as to how businesses can interpret and comply with the ordinance and much insight can be taken from EU caselaw because the ordinance incorporates many principles from EU competition law. The ordinance is however potentially very broad in its impact because it can catch businesses directly involved in anti-competitive behaviour and also persons who attempt to breach, or who assist in a contravention of, the ordinance."

A new website has been designed to give information on the ordinance and related applications and processes, the Commission said.

The Hong Kong government laid out which businesses will be covered by the law in March, then confirmed the date on which it would come into force.

The government also listed the fees that will be charged by the commission for different applications under the law.