Understanding how competition authorities learn about potentially problematic business agreements, dealings and behaviours can better facilitate strategic compliance planning.

Anna Wu, chairwoman of the Competition Commission in Hong Kong, has signalled that the agency will be “very much complaints driven”. The Commission has reasonably transparent investigative processes ensuring that any complaints describing anti-competitive conduct potentially falling within the scope of the Competition Ordinance get at least a second look. Apart from the 1,250 and counting complaints/queries already received in the first six months of the law’s full commencement, the Commission has other sources of intelligence which may trigger its powers of investigation, including powers to compel the production and/or seizure of evidence (including information and documents in any format) from a business:

  • Leniency programs are the number one source of cartel investigations in many jurisdictions. For some agencies, this means that over 70% of cartels cases are brought to their attention by the first member to report the cartel and cooperate with the agency in exchange for full immunity.
  • Complaints about a business or sector-wide practices can come from end consumers and the general public, as well as suppliers, competitors, whistle-blowers and government bodies.

Enough complaints about a matter of public concern even where no enforcement action is taken may result in a study into the general state of competition in an industry – as was the case with the auto-fuel and residential building maintenance markets in Hong Kong.

  • Agency intelligence from its own research, other processes and the media is often used in an enforcement context.

This includes information provided in informal “friendly” interactions with competition agencies (such as in the course of a market study, application for block exemption order or merger approval) by a business and its customers, suppliers and competitors, all of which feed into an agency’s ever-growing database.

  • Overseas investigations by a competition authority can result in parallel investigations in other jurisdictions. Leniency applicants often provide waivers to agencies to facilitate their cooperation on cross-border cartels.

Pro-actively managing your company’s internal/external communications and documents is therefore a critical part of any competition law compliance strategy. Incorporating basic principles into an existing communications policy and implementing stricter record-keeping procedures for certain high risk practices or areas can go a long way in protecting the business from assertions of a potential contravention.