A Competition Law for Hong Kong

Julienne Chang, Marc Waha, Jun 26, 2012

The Competition Ordinance 2012 was adopted by the Hong Kong Legislative Council on June 14 and signed into law by the Chief Executive on June 21.[1] The Ordinance represents a major milestone on the way towards comprehensive competition policy reform in Hong Kong. It establishes a Competition Commission with wide-ranging investigative powers and a Competition Tribunal that can apply severe sanctions. Many forms of competition restrictions that were hitherto tolerated are prohibited under the law.

But the adoption of the Ordinance, while a significant step, is not the last one. The Ordinance will enter into force at a date to be set by the Secretary for Commerce. The Administration has indicated that the institutional provisions would take effect first to allow for the establishment of the new authorities, with the substantive provisions of the Ordinance becoming effective later, presumably after initial enforcement guidelines are issued by the Competition Commission. The Commission is required to consult the public on proposed guidelines. As a result, it would be surprising if the new competition regime were to become effective before 2014.

A brief description of the tortuous legislative history may shed some light on the challenges ahead for the Competition Commission. This is the focus of our first section. The following sections describe the scope of the Ordinance and its enforcement mechanisms.

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A Competition Law for Hong Kong