Reed Smith Client Alerts

Authors: Alex Wai Ming Kaung David G. Harrington David Morrison Nathan P.W. Dentice William J.G. Barber

Who should be aware of the new Competition Ordinance (Cap. 619) (CO)? – If you are operating a business offering goods or services in Hong Kong or considering acquiring one, it is important that you are aware of the new rules under the CO and plan for their introduction.

What does the new CO regulate? – Generally, it prohibits all contractual arrangements and business practices that have the object or effect of harming competition in Hong Kong. With respect to mergers, it only restricts telecommunications mergers. Examples of anti-competitive conduct include:

  • Price fixing – exchange of information on future price intentions, resale price restrictions imposed by suppliers on retailers, wage-fixing, price recommendation by trade associations, fee scales set by professional bodies
  • Market sharing – dividing up a market e.g. by agreeing with competitors not to sell to each other’s customers in order to be “sheltered” from competition in the allotted portion of the market
  • Output limitation – production or sales quota arrangements involving competitors limiting the volume or types of products available in the market

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