Most Read Contributor in Hong Kong, September 2016
As mentioned in our previous alert in this series, the Hong Kong
Competition Commission's (the "Commission")
investigative process begins with an Initial Assessment to screen
suitable cases for further investigation or other action.
What is the Objective of the Initial Assessment?
The Commission's objective at the initial stage is to
determine whether there is reasonable cause to suspect that a
contravention of the competition rules has occurred, and make a
determination as to whether further investigation is appropriate.
Two basic requirements must be met before the Commission will
consider commencing a formal investigation:
First, the Commission must be satisfied there is sufficient
evidence to establish a reasonable cause to suspect that a
contravention has taken place. All this requires is that the
Commission is satisfied beyond mere speculation that there may have
been a contravention of a competition rule. This is a fairly low
Second, the Commission must be satisfied the case is one worth
pursuing, having regard to a range of factors including, inter
alia, the potential impact of the conduct on competition and
consumers, the Commission's enforcement priorities and
objectives, the public benefit that would result from further
investigation, and whether the available evidence indicates that
the Competition Ordinance may have been contravened.
What Powers Does the Commission Have at this Stage?
During the Initial Assessment phase, all enquiries are made on a
voluntary basis. Until a formal investigation is commenced, the
Commission does not have power to compel
businesses to provide documents, information and give evidence.
Accordingly if you are contacted by the Commission, it is important
for you to ascertain the basis upon which the Commission relies to
seek your cooperation before you provide the requested information
Although you are not legally required to cooperate with the
Commission during this early stage, you may decide to do so in good
faith, as it is generally beneficial to establish a good working
relationship with the Commission and to do what you can to persuade
the Commission there is no case for them to pursue. However, before
you volunteer any information to the Commission, you should conduct
a careful review of the evidence internally to avoid inadvertently
providing unhelpful evidence to the Commission to your own
What are the Outcomes of the Initial Assessment?
At the end of the Initial Assessment, the Commission may
commence a formal investigation if it is satisfied there is
sufficient evidence and the requirements set out above are met. Due
to the need to preserve confidentiality and conduct an effective
investigation, the Commission will not necessarily always inform a
complainant (where there is one) of internal procedural steps
taken. The Commission will nonetheless endeavour to keep the
complainant generally informed as the matter progresses when it
If the Commission decides not to proceed to a formh3l
investigation, it may:
Take no further action, in which case the complainant, if there
is one, will be notified.
Conduct a market study, which may be the appropriate response
where the evidence points towards structural problems in the market
rather than a specific contravention.
Refer the matter to another agency, e.g., the Communications
Authority or the ICAC.
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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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