While Competition law has been established in some jurisdictions for well over a century now, other (although increasingly few) jurisdictions remain without a competition regime. The last five to ten years have seen a rapid introduction of new competition regimes, particularly in major Asian jurisdictions.

The origins of competition law can be traced back to a nineteenth century manufacturing boom which led to severe price wars in the United States. Competitors began to create trusts to fix prices (think Rockefeller in the Standard Oil Company case). The US government responded in 1890 with the Sherman Act prohibiting contracts, combinations and conspiracies which restrained trade and monopolisation.

New Zealand's first competition regime was provided for by the Monopolies Prevention Act in 1908, although this law applied only to designated agricultural implements. A string of subsequent legislation culminated in the Commerce Act in 1986, which really set the foundations for New Zealand's current competition law, making it one of the world's better established competition regimes.

Today very few of New Zealand's major trading partners remain without competition laws. However, in jurisdictions where competition law is a relatively new concept, people on the ground (that the New Zealand businesses actually deal with) may be unfamiliar with new rules governing their conduct. For example, while Japan, South Korea and Taiwan have had functioning competition regimes for some time, the regimes in Indonesia, Malaysia, Papua New Guinea, Pakistan, Thailand and Vietnam are comparatively recent. In this article we focus on the regimes of Hong Kong, Singapore, China and India, for all of which modern competition laws are a relatively recent phenomenon.

Hong Kong

For some time now, Hong Kong has been one of the most developed economies without competition laws. Some Hong Kong businesses have viewed this situation as offering Hong Kong a source of competitive advantage over its trading partners – companies are free to operate without the same strictures faced by their western counterparts (at least insofar as their conduct doesn't extend outside of Hong Kong).

However, that the smaller businesses (who pined for the introduction of a competition regime) have won out as in June 2012 the Hong Kong Legislative Council adopted the Competition Ordinance. The Ordinance sets out prohibitions on restrictive agreements/concerted practices and abuses of market power (similar to New Zealand). The Ordinance also introduces a prohibition on anticompetitive mergers, though initially this will be limited to apply only to the telecommunications industry. Once enacted, a Competition Commission will be established to investigate anti-competitive conduct and enter into leniency arrangements with cartel whistle-blowers.

Despite being on the legislative agenda for around 15 years now (including more than 200 government amendments), the regime is still not expected to come into practical effect for at least another year. .


The People's Republic of China (PRC) has regulated competition for some time, although the original legislation provided a fairly incoherent competition regime. In 2008, seeking to overhaul the existing law, the PRC's Anti-Monopoly Law (AML) came into effect following a 'battle for hearts and minds' between EU and USA competition policy makers. The AML defines and prohibits "monopolistic conduct" including anti-competitive agreements, abuse of a dominant position and mergers eliminating or restricting competition. In practice, the operation of this law has largely relied on a set of secondary legislation, making it particularly complicated to apply.

The AML established a mandatory merger regime, triggered by jurisdictional thresholds tied to global turnover or PRC turnover. Despite this, the Ministry of Commerce (MOFCOM) can investigate any merger that it considers may restrict or eliminate competition. There have been no such reported cases to date and it remains unclear under what circumstances MOFCOM will exercise this power.

The AML also provides a leniency regime for cartel whistle-blowers, however a lack of clarity around the grant of immunity has made cartelists reluctant to apply for leniency to date.

By international standards the PRC's Anti-Monopoly Enforcement Agency (AMEA) has not exhibited high levels of enforcement independence or transparency. In 2009, its merger control arm denied approval of The Coca-Cola Company's proposed acquisition of China Huiyuan Juice Group Limited due to concerns surrounding portfolio power. While this ground is not unheard of in other jurisdictions, it is a particularly rare ground for objection. Underlying evidence or conclusive reasons were not provided for this decision.


Singapore's Competition Act 2004, was largely modelled on the UK Competition Act 1998. It prohibits anti-competitive agreements, decisions and practices, abuse of a dominant position and mergers which have resulted or may be expected to result in a substantial lessening of competition in a market.

Like New Zealand, Singapore operates a voluntary merger notification regime, and provides a leniency regime for cartel informers.


India has had the Monopolistic and Restrictive Trade Practices Act since 1969, though this legislation failed to stem a growth in Indian cartels. Indeed, despite enacting the Competition Act (CA) in 2002 the Competition Commission of India (CCI) remained largely ineffective until a "complete notification" law rendered the regime fully operational in June 2011. The CA prohibits agreements, abuse of a dominant position and horizontal and vertical "combinations" which cause or are likely to cause an "appreciable adverse impact" on competition.

The CCI operates a mandatory pre-merger notification regime where specified thresholds are exceeded. It also operates a leniency regime for cartel whistleblowers primarily modelled on the EU regime.

While the Commission seems to be active in regulating competition, concerns have arisen at its failure to provide detailed economic analysis in rulings and the use of market definitions which are at times viewed as controversial. Some criticism is perhaps not surprising given that it has grown from virtually no staff to around 150in a short period of time (albeit with some assistance from overseas regulators).

What it means for New Zealand companies

The rise of competition laws in these countries mean New Zealand companies need to be aware of their obligations in respect of practices in, or affecting, other jurisdictions. Generally speaking, if you are in compliance with New Zealand law this is a good start, although the definitions of anticompetitive conduct and the relevant merger turnover thresholds differ from jurisdiction to jurisdiction – meaning that what may be illegal in one jurisdiction will not necessarily be so in another. While Singapore has followed a New Zealand style of voluntary merger regime, many other countries, such as China and India, have mandatory merger control, requiring that approval is gained prior to completing a transaction. These can be triggered in seemingly unlikely situations, particularly in joint venture situations (as often the revenues of both companies are combined) irrespective of any effect on competition.

Also, if the worst comes to the worst; it is useful to know which jurisdictions operate a leniency policy for cartel whistle-blowing.

First published in NZ Lawyer, 27 July 2012.