Hong Kong

Competition Tribunal establishes key principles in first two landmark cases

The Tribunal made findings on key principles including the efficiency defense, and clarified critical procedural issues such as the applicable standard of proof.

The Tribunal has held that where the HKCC seeks pecuniary penalties, it will treat the matter as a criminal charge and respondents will have relevant protections under the Hong Kong Bill of Rights. Notably, this means the HKCC must prove its case beyond reasonable doubt.

The Tribunal has also ruled that discovery should approach the standard applicable in criminal proceedings, i.e., the HKCC is required to disclose all relevant used and unused materials to the respondents.

Other key Tribunal findings include:

• employers cannot exclude statements made by employees in their personal capacities from being admissible on the ground of self-incrimination;

• employers are not liable for rogue employees; and

• the respondents have the onus to establish that the efficiency exemption applies if efficiencies are claimed.


Individuals in the firing line as HKCC ups enforcement ante

Since the appointment of former US DOJ official Brent Snyder as CEO, the HKCC has actively targeted individuals, seeking recently seeking the disqualification of a director who allegedly took no steps to prevent the contravention.

In the most recent two prosecutions, the HKCC has sought pecuniary penalties as well as director disqualification orders against individual employees.

Notably in the latest case, the HKCC seeks disqualification of a director who was not involved in the alleged contravention, but who allegedly took no steps to prevent it from taking place.


HKCC provides guidance on information exchange in decision on sales survey

The HKCC has also rejected an application by the local pharmaceutical association to exclude a proposed market survey relating to sales data from the law.

The HKCC concluded that the association did not provide sufficiently compelling evidence of their efficiency claims. It found it unlikely that the inclusion of product level sales data would be indispensable.

The HKCC considered that the exchange of product-specific sales data, or information which would allow such data to be robustly estimated, could raise competition concerns.

On the other hand, the HKCC considered the exchange of total sales data comprised of at least four products of a particular company would unlikely raise competition concerns.

This decision demonstrates HKCC's view that sales data is competitively sensitive, and the exchange of such data among competitors if not handled according to the rules laid down by HKCC could raise competition concerns.