Most Read Contributor in Hong Kong, September 2016
Keywords: Hong Kong, competition commission,
Hong Kong's Competition Commission yesterday published a
draft leniency policy for companies engaged in cartel conduct. The
draft policy outlines the Commission's approach to
Why Introduce a Leniency Policy for Cartel Conduct?
As set out in its Guideline on the First Conduct Rule, the
Commission considers cartels a form of serious anticompetitive
conduct under the Competition Ordinance. The draft policy is
designed to provide a strong incentive for cartel participants to
break from and report any cartel activity.
Overview and Scope of the Leniency Policy
Under the draft policy, the Commission will agree not to bring
proceedings in the Competition Tribunal for a pecuniary penalty
against the cartel member who reports the cartel conduct to the
commission and meets all the requirements for receiving leniency
under the policy. These requirements include fully co-operating
with the Commission's investigation. The cooperation with the
Commission provides that the existence and the content of the
leniency application cannot be disclosed to any other company and
be kept confidential.
The Commission will however remain free to terminate the
leniency agreement should it deem the information provided
incomplete, false or misleading or if the applicant failed to
comply with the terms of its leniency agreement.
To ensure effectiveness, the draft policy makes it clear that
the leniency policy will only be available for the first
undertaking to report a cartel conduct and will only apply to the
most serious anti-competitive practices under the First Conduct
Rule of the Competition Ordinance, i.e., price fixing, output
limitation, market sharing and – last but not least –
The draft policy also specifies that undertakings which will not
have qualified for leniency may nonetheless cooperate with the
Commission and benefit from a more favourable treatment, such as a
reduction of fines, albeit at the sole discretion of the Commission
and ultimately of the Tribunal.
The Leniency Policy and Follow-on Damages Actions
Successful leniency applicants will however not be protected
from the possibility of follow-on actions brought before the
Competition Tribunal by private parties affected by the cartel
conduct. The draft policy notably leaves the door open to the
possibility of a third party request for disclosure of leniency
materials as part of court proceedings, notwithstanding the
confidential handling of leniency applications.
Comments on the draft policy are now sought from interested
parties who are invited to submit comments by 23 October 2015. The
final leniency policy is expected to be adopted before full
implementation of the Competition Ordinance on 14 December
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This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications
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