HKCC succeeds in its first appeal on pecuniary penalties
On 2 June 2022, the Court of Appeal ("CA") allowed the HKCC's appeal, increasing pecuniary penalties imposed against various respondents in two separate cases ("Respondents").
In the Competition Tribunal's earlier decisions, the Respondents (along with their respective subcontractors) were found to have contravened Hong Kong competition law by engaging in market sharing and price fixing arrangements in renovation projects in Hong Kong. The Respondents did not participate in the cartels directly; however, their subcontractors participated, and the Tribunal found that the subcontractors and the Respondents formed a single undertaking for competition law purposes. The Tribunal found the Respondents liable, but granted a reduction in fine calculation given their indirect participation.
The HKCC contested the reduction, arguing that all entities within the undertaking should be equally liable for the infringement. The CA confirmed that the concept of an "undertaking" lies at the heart of Hong Kong competition law modelled on EU jurisprudence, and agreed with the HKCC that the pecuniary penalties should remain determined with reference to the economic activities and conduct of the undertaking as a single economic unit. There should be no separate infringement by each of the entities within the undertaking; instead, each entity should be jointly and severally liable for the pecuniary penalties. Hence, there should be no reduction in the penalty to reflect a particular entity's role as only part of an undertaking.
HKCC publishes work report outlook for 2022-23
On 4 July 2022, the competition authority briefed members of the Legislative Council's Panel on Economic Development on its recent work and outlook for the coming year.
• Since June 2021, the HKCC has commenced proceedings in the Competition Tribunal in four cases, against a total of 18 undertakings and individuals as respondents.
• The HKCC will continue its investigations and enforcement action with a particular emphasis on three areas:
1. Anti-competitive conduct concerning livelihood issues or affecting more vulnerable groups;
2. Cartels that target procurement contracts of government departments and public bodies, and those involving government funding or subsidy schemes; and
3. Conduct affecting digital markets.
• The HKCC commissioned a study on online retail sector in Hong Kong to understand its landscape and potential competition problems.
• The HKCC seeks to work with the Guangdong Administration for Market Regulation to jointly publish a brochure on key principles of the respective competition laws applicable in the Mainland and Hong Kong to promote compliance with competition laws in the Greater Bay Area.
The work report of the HKCC can be accessed here.
Hong Kong authority renews Liner Shipping Block Exemption
On 7 July 2022, the HKCC announced its decision to renew the block exemption order for Vessel sharing agreements ("VSAs") ("Block Exemption Order") for a further four years.
The Block Exemption Order will now remain in place, on the same substantive terms as originally set out in 2017, until 8 August 2026. VSAs are agreements between shipping lines on certain operational arrangements, covering activities such as exchange of slots on each other's vessels, coordination of sailing timetables and use of port terminals. The Commission issued the Block Exemption Order in August 2017 in light of its assessment that this category of liner shipping agreement enhances economic efficiency.
The Block Exemption Order had an initial duration of five years. The HKCC has said that the continuing impact of the COVID-19 pandemic on the prevailing market conditions warrants a review of the Order within a shorter time frame. The Commission will commence a review in three years' time.