Hong Kong Competition Ordinance implementation update

Regulatory Update

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On 23 November 2012, the Hong Kong Legislative Council (LegCo) gazetted the Competition Ordinance (Commencement) Notice (Notice), which announced that certain provisions in the 14 June 2012 Competition Ordinance (Cap 619) will come into effect during 20131. The Notice provides two dates – 18 January 2013 and 1 August 2013 – for these provisions to take effect.

In January 2013, provisions addressing the following substantive areas will take effect:

  • Establishing the Competition Commission as well as its functions and rules and relationship to the government. The Competition Commission will be responsible for administration and enforcement of the Competition Ordinance
  • Guidelines to be issued by the Competition Commission regarding areas such as exemptions, complaints, investigations, safe harbours and other technical matters
  • The Competition Commission’s disclosure and treatment of confidential information
  • Serving Competition Ordinance-related documents on the Commission and others
  • Rules related to merger notification in the telecommunications sector (Hong Kong will not require cross-sector merger notifications – it will continue to be limited only to the telecommunications sector), and
  • Any necessary amendments to other ordinances.

In August 2013, provisions addressing the creation, staffing, powers and practices of the Competition Tribunal, which will be responsible for adjudicating Competition Ordinance cases, will come into effect.

This two-step rollout is consistent with the government’s original plan to first establish the Competition Commission and issue related guidelines, and then implement the Competition Ordinance’s adjudicative functions, thus putting into the place the institutional arrangements. At the time the Competition Ordinance passed, the Commerce and Economic Development Bureau foreshadowed a phased approach "so that the public and the business sector can familiarise themselves with the new legal requirements and make necessary adjustments during the transitional period".

As this transitional period will commence shortly, businesses and other undertakings must take necessary actions to ensure compliance with the new legal restrictions against anti-competitive conduct and consider if any of their business practices, conduct or relationships would benefit from a Competition Ordinance exemption. The DLA Piper Competition Team has extensive experience creating and implementing compliance programs, applying for competition law exemptions and immunities, and counseling on all aspects of competition law.

1The specific provisions effective 18 January 2013 are: (i) sections 1, 2, 35, 38, 40 and 59; (ii) Parts 8 and 9; (iii) Divisions 1 and 2 of Part 12; (iv) section 176; (v) Schedule 5; (vi) Part 6 of Schedule 7; and (vii) Parts 5 and 7 and section 32 of Schedule 8. The provisions effective 1 August 2013 are: (i) Part 10; and (ii) Part 3 of Schedule 8.