Become a member

Get the best offers and updates relating to Liberty Case News.

― Advertisement ―

spot_img

Thank you for your feedback – In-House Community Congress 2022 -Hong Kong

Thank you for submitting the feedback form. If you have any questions or require a copy of the slides from speakers at the Hong Kong...
HomeKeeping Hong Kong competitive

Keeping Hong Kong competitive

Rose Webb, chief executive officer of the Competition Commission of Hong Kong, talks about the city’s new Competition Ordinance.

What can large firms do to be more compliant with the ordinance?
Compliance with the Ordinance should be straightforward. Regardless of their size, businesses should make sure they never agree with their competitors to engage in cartel activities, which includes price fixing, market allocation, output restriction and bid-rigging. They should also watch out for other arrangements between businesses that in some circumstances can harm competition, such as sharing of competitively sensitive information like future price intentions.

For larger businesses that might have substantial market power they also have to ensure they don’t abuse that power.

Our overall message is, if you “act fairly and compete on a level playing field” you will find that compliance is not necessarily costly or complicated. The key to successful competition compliance is to understand the risks a business is exposed to, manage those risks, and ensure that all your staff are mindful of the need for compliance.

To help businesses review their business practices and develop a compliance strategy that best suits their needs, the Commission has published a practical toolkit “How to comply with the competition Ordinance. Businesses are welcome to download it from the Commission website.

What rights do companies have when being investigated?
When it has reasonable cause to suspect a contravention, the Commission has powers under the Ordinance to require a business/person to provide documents and information. It may also require a person to attend before the Commission to answer questions. Any person required by the Commission to attend may be accompanied and represented by a legal adviser. Recordings and any transcripts made of the interview will be provided to the person interviewed upon request when practicable.  These recordings and transcripts will be subject to the person’s confidentiality obligations under the Ordinance.

The Commission also has the capacity to seek a search warrant to enter and search premises. The company whose premises are being searched has the right to request evidence of identity of the authorised officer executing the warrant and to inspect the warrant.

The Commission’s use of its investigation powers is explained in its Guideline on Investigations.

Section 58 of the Ordinance provides that the Commission’s powers under the Ordinance do not affect any claims, rights or entitlements that arise on the ground of legal professional privilege (LPP). Companies/persons are not required to provide information to the Commission where that information is protected by a valid claim to LPP. The Commission’s guidance on “Investigation Powers of the Competition Commission and Legal Professional Privilege” explains how the Commission handles claims to LPP.

What is the best way for corporations being investigated to offer a commitment?
As set out in the Commission’s Guideline on Investigations, the Commission has a range of enforcement responses at its disposal, including accepting commitments. The commitment process may be initiated by the Commission or parties subject to the Commission’s investigation at any time. If the Commission accepts a commitment, it may agree to terminate its investigation and not to bring proceedings in the Tribunal. The Commission may withdraw its acceptance of a commitment in the event of a material change of circumstances or where it has reasonable grounds to suspect either failure to comply with the commitment or the commitment was based on incomplete, false or misleading information. If a company/person fails to comply with a commitment accepted by the Commission, the Commission may seek to enforce the commitment in the tribunal.

If a corporation is considering offering a commitment it is recommended that it contact the Commission to discuss the proposed terms. The Commission is required to publish any commitment that it accepts in a register. The published commitments may provide a useful guide to companies of the types of matters that should be dealt with in any proposed commitment.


What can in-house counsel of companies do to prepare and cooperate during a dawn raid?
Under section 48 of the Ordinance, the Commission may apply to the Court for permission to enter and search any premises to obtain documents, information and other items (for example computers) relevant to its investigation.  In-house counsel are advised to familiarise themselves with the Ordinance and the related sections in it. They may also refer to the Guidelines and other guidance documents published by the Commission on the topic, such as the Guideline on Investigations and the guidance on “Investigation Powers of the Competition Commission and Legal Professional Privilege”. They could consider providing clear guidelines for their company employees to follow during a search and make sure employees understand the importance of cooperating with the Commission during its investigation.In-house counsel could also make arrangements with any external legal advisers about the manner in which their assistance is to be sought. Where the parties have requested that their legal advisers be present during a search and there is no in-house lawyer already on the premises, Commission officers will wait a reasonable time for external legal advisers to arrive, unless there are concerns that waiting for a legal adviser to arrive will adversely impact the efficacy of a search.In house counsel may wish to remind employees that the Ordinance provides that failure to comply without reasonable excuse with any requirement imposed under the Commission’s investigation Powers is a criminal offence punishable by fines of up to HK$200,000 and imprisonment for one year. The Ordinance also creates criminal offences punishable by fines of up to HK$1 million and imprisonment for two years in respect of providing false or misleading information, destroying, falsifying or concealing documents, obstructing a search under section 48 warrant, or disclosing confidential information received from the Commission.

How is the Commission adapting its approach in light of new technologies?
The impact of new technologies on competition in markets is an emerging issue in competition law globally. There have been discussions and developments in different jurisdictions and enforcement in this area is not entirely free from controversy. The Competition Commission will keep abreast of these developments and also continue to liaise and communicate with its international counterparts on this topic.

Generally speaking, all businesses are protected by the Competition Ordinance, which, by prohibiting anti-competitive behaviour, helps maintain a level-playing field. Businesses are enabled to resist anti-competitive terms which might otherwise constrain their freedom to operate. They also benefit from increased market opportunities and reduced barriers that facilitate market entry and trade.

––––––––––––––––
E: enquiry@compcomm.hk
W: www.compcomm.hk