Keywords: Hong Kong, competition commission, LegCo, draft guidelines

On 26 May 2014, the Competition Commission (the "Commission") provided the Hong Kong Legislative Council (LegCo) with an update on its preparation work. As anticipated much of the Commission's initial efforts will be focussed on developing procedural and substantive guidelines.

The Commission announced that it will conduct an engagement phase with stakeholders prior to publishing draft guidelines for consultation. The engagement phase will commence this week and continue through to July 2014. The Commission anticipates that it will publish draft guidelines in September 2014 and undertake a consultation phase with LegCo, stakeholders and the general public with the aim of finalising the guidelines in the first half of 2015. While the Commission did not indicate when the substantive provisions of the Competition Ordinance (the "Ordinance") will be implemented, the proposed timeline suggests mid-2015, at the earliest.

Importantly, the guidelines will indicate how the Commission will interpret and give effect to the First Conduct Rule, Second Conduct Rule and the Merger Rule. In addition, the Commission will publish guidelines setting out how applications for decisions or block exemption orders are to be made, lodging complaints and procedures for initiating and conducting investigations.

The Commission also indicated that it would conduct publicity programmes to promote public understanding of the Ordinance. Such initiatives are important as raising public awareness of competition issues has made it easier for competition authorities in other jurisdictions to obtain information from the public about breaches of competition law.

Although the recruitment of the Chief Executive Officer continues, the Commission confirmed that the Senior Executive Director and two Executive Directors have been appointed and have commenced their new roles. The Commission went on to confirm that it will have a total of 34 staff by mid-2014. We understand that the Commission has taken steps to establish bilateral connections with competition authorities in other jurisdictions and joined the International Competition Network, an international forum of more than 120 competition authorities from which the Commission will be able to seek guidance.

The Commission also took the opportunity to publicly encourage businesses to familiarise themselves with the Ordinance and review their trade practices to ensure compliance with the law. Relevantly, Ms Anna Wu, the chairperson of the Commission, stated that the Commission would adopt a more lenient approach towards non-serious and unintentional anti-competitive behaviour in the early stage of implementation of the Ordinance to assist small to medium-sized enterprises. However, she emphasized that serious breach would not be exempt. Furthermore, to encourage whistleblowers to cooperate with the Commission, Ms Wu explained that the Commission is working to ensure that whistleblowers are offered appropriate protection.

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Originally published on 20 May 2014

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