About Competition Commission

Competition Commission

The Competition Commission is Hong Kong's independent statutory competition regulator, established under the Competition Ordinance (Cap. 619). Enacted in June 2012 after a long legislative passage, the ordinance gave Hong Kong its first cross-sector competition law; the Commission was set up in 2013, and the ordinance came fully into force on 14 December 2015. The Commission investigates anti-competitive conduct under the First and Second Conduct Rules, issues guidelines and market studies, operates a cartel leniency policy, and brings enforcement cases before the separate Competition Tribunal, a judicial body that decides the cases and imposes penalties. It is the youngest body in this group of Hong Kong institutions — included in directories on the strength of its case-law record rather than its age.

Hong Kong was a late adopter of competition law. For decades its free-market reputation rested on low taxes and open trade rather than on rules against cartels, and proposals for a general competition law were debated for years before the Competition Bill finally passed the Legislative Council in 2012. The resulting regime is deliberately distinctive: a judicial enforcement model in which the Commission investigates and prosecutes but a tribunal adjudicates; a merger rule that, in practice, applies only to the telecommunications sector; and concurrent jurisdiction shared with the Communications Authority in telecommunications and broadcasting.

The road to the Competition Ordinance

Calls for competition legislation in Hong Kong grew through the 1990s and 2000s as economists and consumer advocates pointed to concentrated sectors — supermarkets, fuel, property and transport among them — in which a small number of suppliers faced limited rivalry. A Competition Policy Advisory Group had existed since 1997, but its non-statutory policy approach lacked sanctions. A public consultation and an independent review in the mid-2000s recommended a cross-sector law enforced through the courts, and the government introduced the Competition Bill into the Legislative Council in 2010.

The bill's passage was hard-fought, taking two years of scrutiny amid lobbying by business groups concerned about the law's reach, particularly for small and medium-sized enterprises. Amendments during passage adjusted the treatment of smaller businesses and the warning-notice procedures for less serious conduct. The Competition Ordinance (Cap. 619) was enacted on 14 June 2012, aiming, in its terms, to prohibit conduct that prevents, restricts or distorts competition in Hong Kong and to prohibit mergers that substantially lessen competition. A phased commencement followed: the institutional provisions came first, allowing the Commission and the Competition Tribunal to be established and guidelines prepared, and the conduct rules themselves commenced on 14 December 2015.

Establishment and leadership

The Competition Commission was established in 2013 as an independent statutory body, its members appointed by the Chief Executive. Its first years were spent building an organisation — recruiting investigators, economists and lawyers, drafting the guidelines that explain how it interprets the ordinance, and preparing businesses for the new law. On 3 September 2014 Dr Stanley Wong was appointed the Commission's first chief executive, bringing experience from Canada's competition regime to the task of operationalising Hong Kong's. On 2 November 2015, shortly before full commencement, the Commission issued its practical compliance toolkit, "How to Comply with the Competition Ordinance", for businesses adjusting to the rules.

The Commission operates with an annual budget reported at approximately HK$80 million in its early years — modest by the standards of overseas competition authorities — and a staff of investigators, lawyers and economists scaled to a caseload of a few major tribunal cases a year alongside a large volume of complaints and enquiries. From full commencement in December 2015 to February 2017 it had already received and processed more than 2,000 complaints and enquiries and assessed about 130 complaints in depth, a pattern that has continued: thousands of approaches, a small number of investigations, and a handful of tribunal proceedings at any time.

The conduct rules and the judicial model

The ordinance's substantive core consists of two conduct rules. The First Conduct Rule prohibits agreements, concerted practices and decisions of associations of undertakings that have the object or effect of preventing, restricting or distorting competition in Hong Kong. Within it, four categories are treated as serious anti-competitive conduct: price fixing, market sharing, output restriction and bid-rigging. For serious conduct the Commission may proceed directly to the Tribunal; for other First Conduct Rule matters it must generally first issue a warning notice giving the parties a chance to stop. The Second Conduct Rule prohibits undertakings with a substantial degree of market power from abusing that power to prevent, restrict or distort competition.

Enforcement follows a judicial model unusual among competition regimes. The Commission investigates — with statutory powers to require documents and information, interview witnesses and conduct dawn raids under warrant — and then applies to the Competition Tribunal, which sits within the High Court, for declarations and orders. The Tribunal, presided over in its early cases by Mr Justice Godfrey Lam, decides whether the ordinance has been contravened and what pecuniary penalties and other orders to impose; penalties can reach ten percent of a Hong Kong undertaking's turnover for up to three years of infringement. The Commission also handles applications for exclusions and exemptions, issues decisions on whether agreements benefit from block exemption, and maintains a leniency policy under which the first cartel member to come forward and cooperate can receive full immunity from proceedings — a standard tool for destabilising secret cartels.

The first case: Nutanix and bid-rigging

The Commission's first case was commenced on 23 March 2017, when it brought proceedings in the Competition Tribunal against five information technology companies — Nutanix Hong Kong Limited, BT Hong Kong Limited, SiS International Limited, Innovix Distribution Limited and Tech-21 Systems Limited — over alleged bid-rigging in a tender by the Hong Kong Young Women's Christian Association for the supply and installation of a new IT server system. The alleged scheme involved cover bids and the exchange of sensitive information through intermediaries: certain bidders, it was said, submitted dummy or less attractive bids so that a chosen supplier would win, in a tender conducted in mid-2016.

The case, Competition Commission v Nutanix Hong Kong Limited & Ors (CTEA 1/2017), became the proving ground for the whole regime. Its first case-management conference took place in May 2017, and the Tribunal's judgment, delivered by Mr Justice Godfrey Lam in 2019, found that Nutanix, BT, Innovix and Tech-21 had each contravened the First Conduct Rule, while the case against SiS was dismissed. The judgment established that the standard of proof in Hong Kong competition proceedings is the criminal standard — beyond reasonable doubt — a foundational ruling for all later cases. That the Commission chose a bid-rigging case to open its account was widely expected: bid-rigging had been identified as an enforcement priority, is classified as serious anti-competitive conduct requiring no prior warning notice, and strikes directly at the integrity of procurement by businesses and non-profit bodies alike.

First penalties: the decoration contractors case

In 2020 the Tribunal imposed the Commission's first pecuniary penalties. The case concerned ten decoration contractors that had engaged in market sharing and price fixing for renovation works at a public housing estate — agreeing among themselves how to allocate floors of the estate and coordinating prices for the decoration packages offered to new tenants. The Tribunal found serious anti-competitive conduct and ordered each firm to pay penalties ranging from HK$132,000 to HK$740,000. The case demonstrated the regime's reach into small, local trades as well as large corporations: the respondents were modest contractors, and the victims were public housing tenants.

The same period saw the Commission's docket widen. In 2020 it also launched proceedings against an IT company over alleged collusion with another business in bidding for a project at Ocean Park, Hong Kong's marine theme park. Its investigations and subsequent cases have addressed sectors including textbooks, building services and technology services, while its advocacy work — market studies, guidelines and public campaigns against bid-rigging in procurement — has aimed to change business culture in a city where trade associations and long-standing commercial relationships made coordinated conduct a familiar, if previously lawful, way of doing business.

Concurrent jurisdiction and market studies

A distinctive feature of the Hong Kong regime is concurrency: in the telecommunications and broadcasting sectors, the Communications Authority shares the Commission's competition jurisdiction, and the two authorities have arrangements for allocating cases to whichever is better placed to handle them. The merger rule illustrates the same sector-specific caution — merger control under the ordinance applies only where a telecommunications carrier licence is involved, there being no general merger regime for the Hong Kong economy, a gap periodically debated in policy circles.

Alongside enforcement, the Commission conducts market studies into sectors where competition appears not to be working well, publishing findings and recommendations that may lead to enforcement, to referrals to government, or to public pressure for change. It issues and revises guidelines on the conduct rules, on its leniency policy for cartels and on cooperation by businesses under investigation, and it runs sustained public education — including campaigns aimed at procurement officers and small businesses — to build understanding of a law that remains young by international standards. Law-firm and academic commentary on its cases is extensive, reflecting Hong Kong's position as a common-law jurisdiction whose competition jurisprudence is watched across Asia.

Assessment and challenges

Assessments of the Commission's first decade note both the significance and the limits of its achievement. It built a functioning enforcement regime from nothing, won its landmark first case, established the standard of proof, secured the regime's first penalties, and normalised the idea that cartels are unlawful in a city that had never before prohibited them. At the same time, commentators observe that its budget and case throughput are small relative to the size of Hong Kong's economy, that tribunal proceedings are slow and costly, and that the absence of a general merger regime and of criminal cartel sanctions leaves its toolkit narrower than those of comparable authorities overseas.

The Commission's defenders reply that Hong Kong's regime was designed to be proportionate and court-centred, and that deterrence in a compact, reputation-sensitive business community does not require a large caseload. What is not in dispute is the institutional fact: since 14 December 2015 Hong Kong has had, for the first time, a cross-sector competition law with an independent authority to enforce it, and the body of tribunal judgments begun with the Nutanix case has given that law practical content.

The Commission today

Today the Competition Commission continues to investigate complaints, operate its leniency programme, conduct market studies and bring cases before the Competition Tribunal from its offices in Hong Kong, publishing its guidelines, decisions and educational materials bilingually. Its caseload continues the pattern set in its first years: thousands of complaints and enquiries received, a fraction investigated in depth, and a small number of proceedings each year chosen for their seriousness and precedent value — with bid-rigging in procurement a persistent priority.

For a directory of Chinese public institutions, the Competition Commission marks the most recent addition to Hong Kong's family of independent statutory regulators. Created by an ordinance enacted in 2012, staffed from 2013 under its first chief executive Stanley Wong, and armed from December 2015, it has given Hong Kong the competition-law chapter of its regulatory state — and its tribunal record, from the Nutanix judgment to the decoration contractors' penalties, is the documentary trail by which that chapter can be read.