Competition is one of the pillars supporting Hong Kong’s sustained prosperity. To ensure the city’s continuing development as a level playing field for businesses, the Hong Kong SAR Government enacted the Competition Ordinance (Cap. 619) in 2012 and the Ordinance came into full effect in December 2015.

About the Competition Ordinance

The Competition Ordinance is an important cross-sector law that safeguards the shared value of competition in Hong Kong. The Ordinance makes anti-competitive business practices illegal. It prohibits three types of anti-competitive conduct described under the following three competition rules:

The First Conduct Rule prohibits arrangements between businesses which harm competition. Examples of such arrangements include cartels which are anti-competitive agreements between competitors to fix price, rig bids, share markets or restrict output. Other arrangements between businesses that can harm competition include resale price maintenance and exchange of commercial secrets.

The Second Conduct Rule concerns “big and bad” businesses. It prohibits businesses with substantial market power from abusing that power to harm competition. Examples of conduct that are commonly associated with the Second Conduct Rule include predatory pricing, anti-competitive tying and bundling as well as refusals to deal.

The Merger Rule prohibits mergers that may substantially lessen competition. At present, this is only of relevance to the telecommunications sector.