The Competition Ordinance (the "Ordinance") provides
for a limited regime of exclusions and exemptions. Agreements or
conducts falling within the scope of an exclusion or exemption will
not contravene the First Conduct Rule and/or the Second Conduct
Rule (the "Conduct Rules"). There is no requirement to
apply to the Competition Commission (the "Commission")
for a decision to secure the benefit of a particular exclusion or
However, undertakings needing greater legal certainty may choose
to apply to the Commission for a Decision under
section 9 and/or section 24 of the Ordinance. Under these
circumstances you are always encouraged to seek legal advice as
early as possible before considering submitting an application and
of course contacting the Commission.
Overview of Exclusions and Exemptions
The Conduct Rules will not apply to:
Agreements enhancing overall economic
efficiency, i.e., agreements that help to improve production or
distribution or promote economic or technical development which
benefit consumers (note however that this exclusion only applies to
the First Conduct Rule).
Agreements or conducts made or
engaged in for the purpose of complying with a legal requirement
imposed by Hong Kong law or for the purpose of providing a service
of general economic interest (when entrusted by the Government to
Mergers (however mergers are still
subject to the merger rules requiring telecommunications mergers to
Agreements or conducts of lesser
significance: agreements are excluded from the First Conduct Rule
when the combined turnover of the undertakings party to the
agreement is less than HK$200 million (insofar as it does not
involve serious anti-competitive conduct); anticompetitive conduct
will not be caught by the Second Conduct Rule when the turnover of
the undertaking is less than HK$40 million.
Statutory bodies unless specifically
brought within the scope by regulation of the Chief Executive (such
as the Federation of Hong Kong Industries). It does not extend to
undertakings who may engage in anti-competitive arrangements with
an excluded statutory body or to entities controlled by a statutory
Agreements and conducts exempted by
the Chief Executive on public policy grounds or to avoid a conflict
with international obligations that directly or indirectly relate
to Hong Kong
What Does the Application Process Involve?
The Commission's review of an application is not subject to
any deadlines. The time required to make a Decision depends on the
complexity of the case and the availability of Commission
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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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As mentioned in our previous alert in this series, the Hong Kong Competition Commission's investigative process begins with an Initial Assessment to screen suitable cases for further investigation or other action.
The investigative process begins by the Hong Kong Competition Commission (the "Commission") identifying a potential contravention of a competition rule.
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