More than six months have passed since the full implementation of the Competition Ordinance on 14 December 2015. On 14 June 2016, the Competition Commission disclosed for the first time statistics on its enforcement activities. It had received 1,250 enforcement contacts and had moved 111 cases to the initial assessment phase, 10 cases of which were under in-depth investigation. Its first ever enforcement action was published on 31 May 2016, in which the Hong Kong Newspaper Hawker Association issued a notice to its members to increase the recommended price at which they sold certain branded cigarette products. The Commission decided not to take any further action after the association quickly rectified its conduct. 

Assessing risk exposure

Anna Wu, chairwoman of the Commission, has signalled that the agency will be “very much complaints driven”. Apart from the complaints/queries, 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 from a business:

  • Leniency programs are the number one source of cartel investigations in many jurisdictions. For some agencies, over 70% of cartel 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.
  • 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 by a business and its customers, suppliers and competitors.
  • 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 crossborder cartels.

Pro-actively managing your company’s internal/external communications and documents is therefore a critical part of any competition law compliance strategy and can go a long way in protecting the business from assertions of a potential contravention. 

Project on trade and professional associations

On 14 March 2016, the Commission published a press release announcing the progress of its compliance project on trade and professional associations. The statement noted that the Commission had identified over 20 associations whose public practices appeared to place them at high risk of contravening the Competition Ordinance. Examples of high risk practices include price recommendations or fee scales as well as codes of conduct or rules that may restrict price competition between competing association members. 

Among the identified associations, the Commission noted that 12 associations removed or were in the course of removing their price restrictions or fee scales. The Commission warned that those associations not taking steps to end problematic practices were risking enforcement action.