Hong Kong: Hong Kong Competition Commission Consults On Draft Cartel Leniency Policy

On September 23, 2015, the Hong Kong Competition Commission (the Commission) released a draft leniency policy for undertakings engaged in cartel conduct (the Policy) for public consultation.  Feedback is invited by the deadline of October 23, 2015.1

Cartels are arrangements between competitors to fix prices, restrict output, share markets and rig bids that have the object of preventing, restricting or distorting competition.  Such conduct is deemed a form of "Serious Anti-competitive Conduct" under the Hong Kong Competition Ordinance (Cap. 619) (the Ordinance).  Because of their illegal nature, cartels are typically organized and implemented in secret, making them difficult for competition authorities to detect.

Under section 80 of the Ordinance, the Commission may enter into a leniency agreement with an undertaking2 not to bring or continue proceedings in the Competition Tribunal (the Tribunal) for a fine in exchange for the undertaking's cooperation in an investigation or in proceedings under the Ordinance.

Consistent with similar leniency practices globally, the draft Policy is designed to help the Commission identify and combat cartels and incentivize cartel members to cease illegal cartel activity.

Key Elements and Scope of the Draft Policy

The draft Policy would give the first member of a cartel who "blows the whistle" to the Commission immunity from proceedings in the Competition Tribunal for a fine, as long as the whistleblower meets all the requirements for leniency:

(a)     leniency will only be available for cartel conduct, not other forms of anti-competitive behaviour (such as abuse of substantial degree of market power or resale price maintenance).  This is because cartels are universally condemned as economically harmful.

(b)     only an undertaking may apply for leniency;

(c)     leniency is only available to the first undertaking that reports the cartel conduct to the Commission (as long as it meets all the requirements for leniency);

(d)     if the Commission decides to offer leniency to the undertaking in question, it will enter into a leniency agreement with that undertaking; and

(e)     the undertaking will be required to sign a statement of agreed facts admitting its participation in the cartel.

Where the Commission has entered into a leniency agreement with an undertaking, leniency will usually extend to its directors, officers and employees.  This is subject to the relevant individuals' cooperation with the Commission throughout the investigation and any ensuing proceedings.

A draft leniency agreement is annexed to the draft Policy to ensure potential leniency applicants understand the nature of their obligations should they be successful in applying for leniency for cartel conduct.

Follow-on Actions Still are Possible Against Successful Leniency Applicants

The fact that a company is granted and enjoys leniency under the Policy will not protect it from later follow-on actions. 

Section 110 of the Ordinance provides that private parties who have suffered loss or damage as a result of any act that has been determined to be a contravention of a conduct rule have a right of action against any person who has contravened the rule or has been involved in that contravention.  "Determined" means, amongst others things, that the Tribunal has made a decision that the act is a contravention of a conduct rule in the Ordinance.

Undertakings that do not Qualify for Leniency

The Commission will have discretion to provide favourable treatment to undertakings that cooperate with it during a cartel investigation, although ultimately it is a matter for the Tribunal and the courts to decide whether a fine is appropriate in the circumstances (and if so, the level of that fine) or whether other orders should be made.

Confidentiality, Non-Disclosure and Cooperation in Cross-border Investigations

An applicant for leniency will be required to enter into a non-disclosure agreement with the Commission and will have to keep the fact of the investigation, its application for leniency and the terms of any leniency agreement confidential, unless the Commission's prior consent has been obtained or the disclosure of the information is required by law.  Any applicant in breach of its non-disclosure agreement will cease to be eligible for leniency under the Policy.

For leniency application materials in the Commission's possession (e.g., any confidential information created by an applicant for the application and the Commission's records of the leniency application process), the Commission has stated in the draft Policy that, subject to the requirements of the Ordinance and to the extent applicable, it will not disclose such materials unless:

(i)       it is compelled to do so by an order of the Tribunal or any court, by law or any requirement made by or under law;

(ii)     it has the consent of the leniency applicant to disclose the materials;

(iii)    the relevant information or document is already in the public domain; or

(iv)    the Commission terminates the leniency agreement in accordance with section 81 of the Ordinance.

In appropriate cases and where permitted by law, a leniency applicant may be required to authorize the Commission to exchange confidential information with authorities in other jurisdictions as a condition for entering into a leniency agreement.

The Role of the Communications Authority

Currently, the Commission is principally responsible for enforcing the Ordinance but has concurrent jurisdiction with the Communications Authority for anti-competitive conduct in the telecommunications and broadcasting sectors.  The Communications Authority has yet to decide whether to adopt a leniency policy and is inviting views and submissions from broadcasting and telecommunications licensees.


This development is a significant step in the evolution of Hong Kong's fledgling antitrust regime, following the landmark adoption by the Legislative Council in June 2012 of the Ordinance.  At a time when many cartels are international in scope and are prosecuted by antitrust agencies in multiple jurisdictions concurrently, the adoption of the Policy will put Hong Kong on an equal footing with many other countries that already have leniency programs, for example, the European Union, the United States, Australia and Japan, to name just a few.

Multinational enterprises doing business in Hong Kong can no longer afford to dismiss the Special Administrative Region as a jurisdiction that has no competition regime or antitrust enforcement.  Going forward, antitrust compliance in Hong Kong will be as important as compliance in other markets.  The risk and cost of cartel participation in Hong Kong is now significantly greater than it has been historically.

For those companies who are part of a cartel, the Policy, once adopted, will provide an opportunity to come forward and provide information and cooperation, in exchange for the avoidance of substantial fines.  Experience in other jurisdictions has shown that the vast majority of cartels investigated by antitrust authorities today come to light as a result of whistleblowers coming into the authority under leniency programs.


1. Along with the draft Policy, the Commission has also published a Guide to the Draft Cartel Leniency Policy summarising the approach of the Commission in preparing the Policy. The draft Policy and the Guide to the Draft Cartel Leniency Policy can be downloaded via the link below:


2. An "undertaking" refers to any entity (including a natural person), regardless of its legal status or the way in which it is financed, which is engaged in an economic activity.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions