The Competition Ordinance (Cap. 619) ("Competition
Ordinance") came into full effect on December 14, 2015. There
are three major competition rules under the Competition Ordinance,
which are the First Conduct Rule ("FCR"), the Second
Conduct Rule, and the Merger Rule. In particular, employers should
be aware of the FCR, which, subject to certain exemptions,
prohibits an undertaking from making an agreement or engaging in a
concerted practice that has the object or effect to prevent,
restrict, or distort competition in Hong Kong.
According to the Guideline on the FCR issued by the Competition
Commission on July 27, 2015, discussions, collective bargaining, or
arrangements (as the case may be) with respect to salary or other
conditions of work between one or more employees and their
employers, or between a trade union and an employer, are outside
the scope of the FCR. The primary risk for employers lies in
agreements or arrangements between competing employers. Agreements
between competing employers to restrict hiring from a particular
competitor, fix wages, or exchange competitively sensitive
information, such as wage and employment terms, may all constitute
contraventions of the FCR. Employers should be particularly careful
when making informal exchanges of sensitive information that may
occur, for example, in networking associations among human
resources professionals in a particular industry.
Unless "serious anti-competitive conduct" is involved,
the FCR does not apply to agreements and concerted practices if the
combined turnover of the undertakings involved does not exceed
HK$200 million in the relevant turnover period. Conduct that seeks
to fix prices, share markets, restrict outputs, or rig bids are all
considered to be "serious anti-competitive conduct" under
the Competition Ordinance.
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.
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