On 9 October 2014 the Hong Kong Competition Commission published draft guidelines to Competition Ordinance (Cap.619). The purpose of these is to pave the way for the eventual coming into force of the Ordinance. The Ordinance itself was enacted in June 2012 and presented somewhat of a revolution in competition law in the territory. The Ordinance includes a full merger control regime. At the present time the Merger Rule only applies to mergers involving licensed parties under the Telecommunications Ordinance (Cap 106). The Competition Ordinance also prohibits conduct that will prevent, restrict or distort competition in an echo of the EU rules under Articles 101 and 102 of the TFEU.
The draft guidelines and the Ordinance deal with restrictive agreements including the prohibition of retail price maintenance. However, at this stage there is no envisaged block exemption for vertical agreements like in the EU. The draft guidelines also include guidance as to when a merger will fall within a safe harbour but does not currently include guidance on how turnover will be calculated.
The draft guidelines are available at the Commission’s website here with deadlines on 10 November and 10 December 2014 for various submissions. Interested parties would be well placed now to study the draft guidelines to help the Competition Commission prepare a competitive and effective merger control regime that does not stifle investment in the territory.