Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

Start by selecting your Topic of interest below. Then choose your Regions and finally refine the exact Subjects you are seeking clarity on to view detailed analysis provided by our carefully selected internationally recognised experts.

4. Results: Answers
Competition Litigation
1.
Legal framework
1.1
Which laws regulate competition in your jurisdiction?
Hong Kong

Answer ... Enacted in June 2012, the Competition Ordinance (Cap 619) came into full force on 14 December 2015, establishing the first cross-sector competition law regime in Hong Kong.

The ordinance prohibits three major forms of anti-competitive practices:

  • The First Conduct Rule prohibits anti-competitive agreements and cartel activities (Section 6 of the ordinance);
  • The Second Conduct Rule regulates the abuse of a substantial degree of market power (Section 21 of the ordinance); and
  • The Merger Rule concerns the control of any merger that has or is likely to have the effect of substantially lessening competition. Unlike regimes in other major jurisdictions, this is not an economy-wide merger control regime and the application of the Merger Rule is limited to the telecommunications sector only.

This Q&A focuses on the First Conduct Rule and the Second Conduct Rule.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
1.2
Which authorities are responsible for enforcing the competition legislation? What is their general approach to enforcement?
Hong Kong

Answer ... The Competition Ordinance established two specialist bodies for competition enforcement: the Competition Commission and the Competition Tribunal.

The commission is vested with a broad range of powers to investigate and prosecute suspected breaches, including the power:

  • to require the production of documents and information;
  • to require individuals to attend interviews before the commission;
  • to enter and search premises with warrants issued by the Court of First Instance; and
  • to commence enforcement action and apply to the tribunal for a pecuniary penalty if it has reasonable cause to believe that the First Conduct Rule has been contravened.

The tribunal is an independent adjudicating body that hears competition matters, including:

  • applications made by the commission regarding any alleged contravention of the ordinance;
  • applications for the review of determinations by the commission, including decisions relating to exemptions, exclusions, commitments and leniency;
  • follow-on private actions after a violation of the ordinance has been established; and
  • appeals against any interlocutory decisions, determinations or orders.

The commission currently prioritises enforcement against conduct that is clearly harmful to competition and consumers in Hong Kong. In the context of the First Conduct Rule, the commission has commenced a number of enforcement proceedings before the tribunal since the inception of the ordinance, covering various forms of cartel conduct and anti-competitive practices such as price fixing, market sharing and resale price maintenance. In December 2020, the commission commenced its first enforcement action on the Second Conduct Rule concerning an abuse of substantial market power in the medical gases market in Hong Kong.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
2.
Private claims
2.1
What types of private claim may be brought for breach of competition law in your jurisdiction?
Hong Kong

Answer ... Unlike the regimes in many other jurisdictions, the Competition Ordinance does not permit private standalone actions for the contravention of competition rules (Section 108 of the ordinance).

In other words, in the absence of a tribunal determination on an alleged infringement of the ordinance, victims cannot commence court action to pursue damages. This leaves only one realistic remedy for parties that suffer loss or damage from a breach of the ordinance – lodging a complaint before the Competition Commission.

Once a contravention has been established by the Competition Tribunal, the victim can bring a follow-on action under Section 110 of the Competition Ordinance against the offender or any party involved in that contravention and claim compensation for loss or damage suffered as a result of the contravention.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
2.2
What is the legal basis for bringing a claim for breach of competition law?
Hong Kong

Answer ... If the Competition Tribunal determines there has been an infringement of the Competition Ordinance, victims can commence court action to pursue damages pursuant to Section 110(1) of the ordinance. The tribunal’s ruling as to liability will be binding in any follow-on actions and the claimant is only required to prove causation and quantum.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
3.
Parties
3.1
Who has standing to bring a claim for breach of competition law?
Hong Kong

Answer ... Enforcement action: The Competition Ordinance empowers the Competition Commission to bring proceedings before the Competition Tribunal where it has reasonable cause to believe that there is a breach of the ordinance.

Private action: Parties suffering loss or damage from a breach of the ordinance can lodge a complaint before the commission and bring a follow-on claim before the tribunal.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
3.2
Can a claim for breach of competition law be brought against parties outside the jurisdiction?
Hong Kong

Answer ... Section 8 of the Competition Ordinance provides for the far-reaching extraterritorial application of the First Conduct Rule. As long as the anti-competitive conduct may affect competition in Hong Kong (either by its ‘object’ or ‘effect’), it may be caught by the ordinance regardless of where:

  • the conduct takes place;
  • the agreement is entered into; or
  • the undertakings are located or incorporated.

Section 23 is the equivalent provision on extra jurisdictional application with respect to the Second Conduct Rule.

Hence, if the Competition Tribunal determines that a party outside the jurisdiction is in breach of the ordinance, parties suffering loss or damage can bring a follow-on claim in the tribunal thereafter, with the need to additionally apply for service out of jurisdiction under Order 11 of the Rules of the High Court.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
3.3
Can a claim for breach of competition law be brought against individuals, or only companies?
Hong Kong

Answer ... Legal proceedings for breach of the Competition Ordinance can be brought against individuals and/or companies.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
4.
Collective actions
4.1
Is it possible to bring a collective action for breach of competition law in your jurisdiction? If so, what is the applicable regime?
Hong Kong

Answer ... At present, no class action procedure is available in Hong Kong generally and with respect to competition claims.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
4.2
Do collective actions proceed on an ‘opt-in’ or an ‘opt-out’ basis?
Hong Kong

Answer ... See question 4.1.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
4.3
Do collective actions require certification? If so, what requirements must be met to obtain certification?
Hong Kong

Answer ... See question 4.1.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
5.
Forum
5.1
In what forum(s) are claims for breach of competition law heard in your jurisdiction?
Hong Kong

Answer ... The Competition Tribunal is a specialist court which has primary jurisdiction to hear and adjudicate competition cases and follow-on actions. The tribunal consists of judges of the Court of First Instance and has the same jurisdiction and powers as the Court of First Instance.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
6.
Bringing a claim
6.1
What is the limitation period for claims for breach of competition law in your jurisdiction?
Hong Kong

Answer ... Enforcement action: For contravention of the conduct rules, the limitation period is five years after the day on which the contravention ceased or the Competition Commission became aware of the contravention, whichever is the later (Sections 92 and 94 of the Competition Ordinance).

Private action: The limitation period for any follow-on actions after the Competition Tribunal’s ruling on liability is three years from the expiry of the appeal period following a tribunal decision that the ordinance has been contravened (Section 111 of the ordinance).

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
6.2
What are the formal requirements for bringing a claim for breach of competition law?
Hong Kong

Answer ... Private action: A person that has suffered loss or damage as a result of any act determined to be a contravention of a conduct rule can bring a follow-on action against the offender if:

  • a decision is made by the Competition Tribunal, the Court of First Instance or the appellate courts that the act is a contravention of a conduct rule; or
  • the offender has made an admission, in a commitment that has been accepted by the Competition Commission, that it has contravened a conduct rule.

The tribunal’s ruling as to liability in enforcement proceedings will be binding in any follow-on action (Section 119 of the Competition Ordinance), and the claimant is only required to prove causation and quantum.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
6.3
What are the procedural and substantive requirements for bringing a claim for breach of competition law?
Hong Kong

Answer ... The conduct of proceedings before the Competition Tribunal is primarily regulated by:

  • the Competition Ordinance;
  • the Competition Tribunal Rules (Cap 619D); and
  • Competition Tribunal Practice Direction 1.

Under the Competition Tribunal Rules, the commencement of proceedings varies depending on the type of proceeding. Generally speaking, all proceedings before the tribunal must be commenced by filing an originating notice of application in a form specified under the rules (Rule 7 of the Competition Tribunal Rules).

The Competition Tribunal Rules also expressly provide that other specified forms must be used for certain types of proceedings (ie, reviews of determinations and follow-on actions).

In the originating notice of application, the claimant must state the grounds of the application and the relief sought. In certain types of proceedings, the claimant must also file an affidavit or a statement of claim to set out the grounds of the application in further detail.

A claimant must serve originating documents on the respondent. In addition, the Competition Tribunal will generally (and in some cases must) publish a notice of the application or proceedings on its website.

Thereafter, a respondent may be required under the Competition Tribunal Rules to file a response or defence in certain proceedings.

In all proceedings, the tribunal will consider the nature of the case and provide directions for the future conduct of the proceedings, including directions for the respondents to file evidence, so as to dispose of the case efficiently.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
6.4
What are the implications if a public enforcement action in relation to the same behaviour is pending? Can a claim still be brought?
Hong Kong

Answer ... According to Section 111 of the Competition Ordinance, a follow-on action cannot be commenced before:

  • the expiry of the period during which an appeal may be made to the Court of Appeal; or
  • where an appeal has been made to the Court of Appeal, the period during which a further appeal may be made to the Court of Final Appeal.

Where an appeal has been made, a follow-on action may not be brought before the appeal is determined.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
6.5
How is jurisdiction over the claim determined?
Hong Kong

Answer ... Private action: Generally speaking, where a defendant in civil proceedings wishes to dispute what the applicable law is or whether (for example) the Court of First Instance has jurisdiction in the case, it may make an interlocutory application to seek a determination. Such applications often arise in private contractual disputes where the parties may dispute what the applicable law governing the relevant agreement is.

Enforcement action: As stated in question 3.2, Sections 8 and 23 of the Competition Ordinance provide for the extraterritorial application of the First Conduct Rule and the Second Conduct Rule respectively. As long as the anti-competitive conduct might affect competition in Hong Kong (either by its object or effect), it can come under the ordinance and the Competition Tribunal has jurisdiction over the act and hence the claim.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
6.6
How is the applicable law determined?
Hong Kong

Answer ... Please see question 6.5.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
6.7
Under what circumstances must security for costs be provided?
Hong Kong

Answer ... The Competition Ordinance does not specify the circumstances in which security for costs is warranted. However, in general, on the application of a defendant to an action or another proceeding in the Court of First Instance, the court may order the plaintiff to provide such security for the defendant’s costs of the action or other proceeding as it thinks just if:

  • it appears to the court that:
    • the plaintiff is ordinarily resident out of the jurisdiction;
    • the plaintiff (not being a plaintiff which is suing in a representative capacity) is a nominal plaintiff which is suing for the benefit of some other person and there is reason to believe that it will be unable to pay the costs of the defendant if ordered to do so;
    • the plaintiff’s address is not stated in the writ or other originating process or is incorrectly stated therein (unless the plaintiff can satisfy the court that such mistake was made innocently and without intention to deceive); or
    • the plaintiff has changed its address during the course of the proceedings with a view to evading the consequences of the litigation; and
  • having regard to all the circumstances of the case, the court thinks it just to do so.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
6.8
Are interim remedies available in competition litigation? If so, how are they obtained?
Hong Kong

Answer ... Under Sections 95 and 98 of the Competition Ordinance, if the Competition Tribunal is satisfied that a person is engaged in or proposes to engage in conduct that constitutes or would constitute a contravention of the competition rules and the merger rule, it may – either of its own accord or on an application made for this purpose – issue an interim order pending determination of an application for an order it is entitled to make.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
7.
Disclosure and privilege
7.1
What rules apply to disclosure in your jurisdiction? Do any exceptions apply?
Hong Kong

Answer ... Competition Tribunal Rule 24(1) provides that a party may apply to the Competition Tribunal for an order for discovery and production of a document relating to the proceedings from a person for inspection.

That said, Rule 24(3) provides that such discovery is subject to the discretion of the tribunal. The tribunal may make or refuse to make an order for discovery and production of a document having regard to all circumstances of the case, including:

  • the need to secure the furtherance of the purposes of the ordinance as a whole;
  • whether the information contained in the document sought to be discovered or produced is confidential;
  • the balance between the interests of the parties and other persons; and
  • the extent to which the document sought to be discovered or produced is necessary for the fair disposal of the proceedings.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
7.2
What rules on third-party disclosure apply in your jurisdiction?
Hong Kong

Answer ... Parties may apply for discovery and production of specific documents from non-parties and the Competition Commission. The commission should disclose all relevant material in relation to the prosecution’s case.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
7.3
What rules on privilege apply in your jurisdiction?
Hong Kong

Answer ... Legal professional privilege is applicable in Hong Kong. Generally speaking, it applies to confidential communications between lawyers and clients made for the dominant purpose of obtaining legal advice. Privilege extends to communications with in-house counsel where they are providing independent legal services.

Privilege also applies to communications between a lawyer and a third party that come into existence after litigation is contemplated or commenced and made with a view to the litigation. This is commonly known as ‘litigation privilege’.

A search warrant issued by the courts empowers the Competition Commission to seize and copy relevant documents, computers and other electronic devices found on the premises.

A party under investigation may assert a claim for legal professional privilege during the execution of a search warrant and the commission is not allowed to review materials for which this protection is claimed unless and until the issue is resolved.

If the commission agrees that a document is privileged and the privileged document can be separated from non-privileged materials, the commission will not copy or seize the document. If the commission disputes the privilege claim or if the document is only partly privileged, the commission will seal the document in a suitable container and remove it from the premises.

The investigated party must then, within seven days, prepare an index of the materials and provide a supporting statement setting out the basis for its privilege claim in relation to each item.

The commission will return an item if it is satisfied that the item is privileged, based on the supporting statement. If only part of a document is privileged, arrangements will be made for privileged information to be redacted.

If a dispute on the privilege claim remains, the commission will confer with the party claiming privilege on a mutually agreeable approach – for instance, instructing an independent third-party lawyer to review the privilege claim. If the dispute cannot be resolved, either party may apply to the court for the matter to be determined.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
8.
Evidence
8.1
What types of evidence are permissible in your jurisdiction? Is expert evidence accepted?
Hong Kong

Answer ... Oral evidence and documentary evidence are permissible in Hong Kong. The Competition Tribunal will consider direct or indirect evidence, supplemented by circumstantial evidence, to ascertain whether an anti-competitive conduct can be established.

Expert evidence is also accepted.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
8.2
What is the applicable standard of proof?
Hong Kong

Answer ... While the Competition Ordinance is silent on the burden of proof in competition proceedings, the Competition Tribunal held in May 2019 that the standard of proof to be applied for the enforcement proceedings by the Competition Commission must be beyond reasonable doubt – that is, the criminal standard. However, it is not necessary for every item of evidence produced to satisfy this standard; it is sufficient if the body of evidence relied on, viewed as a whole, satisfies the burden.

In a follow-on private action, which has the nature of civil proceedings, the civil standard of the balance of probabilities applies.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
8.3
On whom does the burden of proof rest?
Hong Kong

Answer ... For enforcement proceedings, the burden of proof rests on the Competition Commission; but the burden may shift to the defendant if it relies for its defence on establishing a balance of probabilities.

In follow-on private actions, the burden of proof rests on the claimant.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
8.4
What defences are typically available in competition litigation?
Hong Kong

Answer ... The Competition Ordinance provides for a range of defences and exemptions. Examples of those which are relevant to competition litigation are as follows:

  • Economic efficiency exclusion: The ordinance excludes agreements that can enhance overall economic efficiency, such as those that would contribute to improving production or distribution or promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit.
  • De minimis exclusion: The ordinance also contains a general exclusion for ‘agreements of lesser significance’, which excludes the application of the First Conduct Rule from agreements between undertakings with a combined worldwide turnover not exceeding HK$200 million in the preceding financial year. This exclusion is not applicable to serious anti-competitive conduct.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
9.
Settlement
9.1
Can the proceedings be discontinued without a full trial? If so, how; and what are the implications?
Hong Kong

Answer ... There are two types of alternative solutions so that enforcement proceedings by the Competition Commission can be discontinued without a full trial: leniency programmes and the Cooperation Policy.

Leniency programmes: Section 80 of the Competition Ordinance empowers the Competition Commission, in exchange for a person’s cooperation in an investigation or in proceedings in respect of the First Conduct Rule, to enter into a leniency agreement with the person not to bring or continue proceedings in the Competition Tribunal for a pecuniary penalty.

However, a leniency agreement does not preclude follow-on private actions by persons that have suffered loss or damage as a result of the cartel.

Two types of leniency can be granted:

  • Type 1: Leniency for an undertaking that discloses its participation in a cartel in which the commission has not started an investigation; and
  • Type 2: Leniency for an undertaking that can provide substantial assistance to an ongoing investigation or assessment of a cartel.

Cooperation Policy: Under the Cooperation Policy, an undertaking that is subject to an investigation may indicate its willingness to cooperate with the Competition Commission.

If the undertaking and the commission can reach agreement on a draft factual summary and a draft cooperation agreement, the commission will indicate the maximum pecuniary penalty it would be willing to recommend to the Competition Tribunal, as well as any other orders sought, so that a full trial can be avoided.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
9.2
In the case of collective actions, is collective settlement possible? If so, how; and what are the implications?
Hong Kong

Answer ... Not applicable.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
10.
Court proceedings
10.1
Are court proceedings in your jurisdiction public or private? If the former, are any options available to the parties to keep the proceedings or related information confidential?
Hong Kong

Answer ... In general, court proceedings in Hong Kong are public, with some exceptions such as matters arising from the Arbitration Ordinance (Cap 609) and proceedings in the juvenile court.

As the court retains its case management power, it can grant specific orders for confidentiality.

In deciding whether to disclose confidential information, the Competition Tribunal will take into account the public interest, legitimate business interests and the interests of the person the information relates to.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
10.2
How do the court proceedings unfold in your jurisdiction?
Hong Kong

Answer ... See question 6.3.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
10.3
What is the typical timeframe for proceedings?
Hong Kong

Answer ... There is no typical timeframe for proceedings, as this is highly dependent on factors such as:

  • the complexity of the factual and legal issues;
  • the number of witnesses; and
  • the volume of documentary and expert evidence involved.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
10.4
What rules apply to the joinder of third parties?
Hong Kong

Answer ... As mentioned in question 6.3, proceedings before the Competition Tribunal are regulated by the Competition Ordinance, the Competition Tribunal Rules and Competition Tribunal Practice Direction 1. Where the ordinance and the rules contain no relevant provisions, the ordinary civil procedure stipulated by the Rules of High Court will apply (Competition Tribunal Rule 4).

Regarding the joinder of parties, Competition Tribunal Rules 22(2) and 23(6) respectively provide that Orders 15(4) and 16 of the Rules of High Court apply to proceedings before the tribunal (with procedural modifications). However, an application to the tribunal (Competition Tribunal Rules 22(1) and 23(1)) is required.

Under Order 15(4) of the Rules of High Court, where separate proceedings are brought by or against more than one person, they can be joined in one proceeding as plaintiffs or defendants, provided that:

  • some common question of law or fact would arise in all the actions; and
  • all rights to the relief claimed in the action relate to the same transaction or series of transactions.

Further, under Order 16 of the Rules of High Court, a respondent may issue a third-party notice to a person that is not a party to the proceedings if the respondent:

  • claims against that party:
    • any contribution or indemnity; or
    • any relief or remedy relating to or connected with the original subject matter of the proceedings and substantially the same as some relief or remedy claimed by the plaintiff; or
  • requires that any question or issue relating to or connected with the original subject matter of the proceeding be determined not only as between the applicant and the respondent, but also as between either or both of them and the third party.

Also, a person that has a sufficient interest in the matters involved in the proceedings before the Competition Tribunal may apply for leave to intervene in the proceedings (Competition Tribunal Rule 20).

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
10.5
To what extent do the decisions of national or foreign competition authorities influence the court’s decision?
Hong Kong

Answer ... Under Article 84 of the Basic Law, courts in Hong Kong will adjudicate cases in accordance with its own laws and may refer to precedents set in other common law jurisdictions (eg, the United Kingdom, Canada and Australia). Bearing in mind the differences in the applicable law and the social context between Hong Kong and other jurisdictions, precedents may be persuasive, but not binding on Hong Kong courts.

As the competition law in Hong Kong is still in its infancy, the Competition Tribunal regularly makes reference to the competition law jurisprudence in other common law jurisdictions and the European Union.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
11.
Remedies
11.1
What remedies are available in competition litigation in your jurisdiction?
Hong Kong

Answer ... Under the Competition Ordinance, the Competition Tribunal may impose a wide array of penalties.

Fines: The Competition Commission can apply to the tribunal to impose a financial penalty of up to 10% of the Hong Kong turnover of the undertaking concerned for each year in which the contravention took place, for a maximum of three years.

Damages: The Competition Tribunal can order a person to pay damages to aggrieved parties that have suffered loss or damage as a result of a contravention of the competition rules.

Disgorgement of profits: The Competition Tribunal can order any person to pay to the government, or to any other specified person, the illicit profit gained or loss avoided by that person as a result of the contravention.

Order to pay the commission’s investigation costs: An offender may be liable to pay investigation costs reasonably incurred by the commission in connection with proceedings for the contravention.

Contractual and behavioural sanctions: In addition to financial penalties, the tribunal has the power to impose a series of contractual and behavioural sanctions to restore healthy competition in the market. These sanctions are set out in Schedule 3 of the Competition Ordinance and include:

  • a declaration that a person has contravened a competition rule;
  • an injunction restraining or prohibiting a person from engaging in conduct that contravenes the ordinance;
  • the restoration of the parties to the position they were in prior to the contravention;
  • a restraint or prohibition against dealing with property; and
  • a declaration that the whole or part of the agreement is void or voidable.

Director disqualification orders: The Competition Tribunal may also, on an application by the commission, disqualify a person from acting as a director for up to five years.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
11.2
Are punitive damages awarded in your jurisdiction?
Hong Kong

Answer ... In general, damages are compensatory. Punitive damages are recognised but are rarely awarded.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
11.3
Will the courts consider any fines imposed by the competition authorities in deciding on the quantum of damages? What other factors will it consider in this regard?
Hong Kong

Answer ... As competition law is a relatively novel area of law in Hong Kong, there are as yet no judgments determining the impact of fines imposed by the competition authorities on the quantum of damages in a follow-on action.

In general, the Competition Tribunal will consider the loss or damage suffered by the claimant.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
12.
Appeals
12.1
Can the decision of the court or tribunal be appealed? If so, on what grounds and what is the process?
Hong Kong

Answer ... Decisions made by the Competition Tribunal may be appealed to the Court of Appeal.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
13.
Costs, fees and funding
13.1
What costs and fees are incurred when litigating in your jurisdiction? Can the winning party recover its costs?
Hong Kong

Answer ... Any person that has contravened the Competition Ordinance can be ordered to pay prosecution costs reasonably incurred by the Competition Commission.

When a private action is instituted, legal costs are inevitable. Even if a claimant is ultimately successful and obtains an order for costs from the unsuccessful party, it will not recover costs as they are normally subject to taxation.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
13.2
Are contingency fees and similar arrangements permitted in your jurisdiction?
Hong Kong

Answer ... Contingency fee arrangements are not permitted.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
13.3
Is third-party funding permitted in your jurisdiction?
Hong Kong

Answer ... Third-party funding is not allowed in Hong Kong, except in the following situations:

  • The funding is for arbitration;
  • The funding is between persons with a legitimate common interest in the outcome of the litigation;
  • The case involves access to justice considerations where litigants would not be able to pursue their claim without funding; or
  • The case concerns miscellaneous practices accepted as lawful even if they constituted third-party funding (eg, funding arrangements for liquidators or trustees in bankruptcy, or subrogation in insurance contracts).

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
14.
Trends and predictions
14.1
How would you describe the current competition litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
Hong Kong

Answer ... Although there are currently no proposed legislative reforms, the Competition Commission has been robust in its enforcement and investigation efforts and it is possible that other, more controversial issues may arise, such as:

  • introducing an economy-wide merger control scheme;
  • establishing the right to bring standalone litigation under the Competition Ordinance;
  • removing the exemption for statutory bodies; and
  • expanding leniency protection to cover subsequent applicants.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
15.
Tips and traps
15.1
What would be your recommendations to parties facing competition litigation in your jurisdiction and what potential pitfalls would you highlight?
Hong Kong

Answer ... While competition law in Hong Kong is a relatively new area, individuals and corporates need to be vigilant as the penalties, pecuniary or otherwise, are severe.

For instance, the Competition Tribunal may impose a fine on any person that has contravened the Competition Ordinance, capped at 10% of annual turnover obtained in Hong Kong for each year of infringement.

Parties facing competition litigation should seek specialist advice to better protect themselves and as a way to find suitable alternative methods to settle proceedings.

For more information about this answer please contact: Christina Ma from Haldanes Solicitors & Notaries

For more information about this answer please contact: Felix Ng from Haldanes Solicitors & Notaries
Contributors
Topic
Competition Litigation