How does the Investigative Process Begin?

The investigative process begins by the Hong Kong Competition Commission (the “Commission”) identifying a potential contravention of a competition rule. The Commission’s sources of information may include:

  • A complaint or query made by the public1
  • The Commission’s request or intelligence gathering Other Commission processes (such as applications for decisions or exemptions) and investigations2
  • Referrals by the government, courts or other statutory bodies or authorities
  • Leniency applications

Two-stage Investigative Process

Upon receipt of information concerning potential anti-competitive conduct, the Commission may commence the investigative process, which is divided into two stages.

Stage 1: InitIal assessment

At this stage, the Commission conducts an initial assessment of whether there is reasonable cause to  suspect that a contravention of the competition rules has occurred, and makes a determination as to whether further investigation is appropriate.

The Commission may seek information on a voluntary basis, but does not have power to compel persons or businesses to provide information to it. 

Stage 2: Formal Investigation

If the Commission proceeds to a formal investigation, its objective at this stage would be to gather evidence to confirm whether or not  a contravention of the competition rules has occurred. In doing so, the Commission will have at its disposal its full arsenal of investigative tools under the Competition Ordinance.

Subject to legal privilege, you are required to cooperate with the Commission in relation to matters relevant to its investigation. Failure to cooperate in any manner including providing false or misleading information, destroying or concealing evidence or obstructing a search by the Commission constitutes a criminal offence punishable by fines  and/or imprisonment.

The Commission may also apply to the Competition Tribunal (the “Tribunal”) for an interim order if it is satisfied a person is engaged in, or proposing to engage in, a contravention of the competition rules, which may include injunction-type orders.

At the end of an investigation, the Commission may adopt any of the following:

  1. Take no further action3.
  2. Accept a commitment from the business(es) under investigation to take any action or refrain from taking any action to address the Commission’s  concerns.
  3. Issue a Warning Notice (for non-serious violations of the First Conduct Rule), where the Commission maintains there is reasonable  cause to believe there has been a contravention of the Ordinance4.
  4. Issue an Infringement Notice or commence proceedings in the Tribunal (for serious anti- competitive conduct or conduct under the Second Conduct Rule)5. 

Commitments

At any stage of the investigative process, business(es) under investigation may offer to enter into commitments with the Commission aimed at addressing the Commission’s concerns. If the Commission accepts a commitment6, it may agree to terminate its investigation or not to bring proceedings in the Tribunal.