The HK General Chamber of Commerce’s Black Swan Problem

HONG KONG COMPETITION LAW – On Monday this week, The Standard newspaper ran an op-ed article contributed by the Hong Kong General Chamber of Commerce (HKGCC).

The article, titled “Get Balance Right on Competition Rules or Run Risks,” was a verbatim repackaging of the HKGCC’s 30 July 2014 Response to Competition Commission’s Consultation.

One of the HKGCC’s key arguments – which is concerned with exempting certain types of vertical agreements from scrutiny by the Competition Commission – could well have a Black Swan problem, and therefore should not be too quickly accepted by the Commission.   Continue reading The HK General Chamber of Commerce’s Black Swan Problem

The Commission Must Rule-Out Its Overly Expansive View of Relevant Markets

HONG KONG COMPETITION LAW – The concept of “market” is central to most cases assessed under competition laws like those in Hong Kong’s newly enacted Competition Ordinance (CO).  In so-called “rule of reason” cases, it is only within carefully constructed market frameworks that levels of competition can be accurately assessed and the detrimental effects of particular conduct identified with an acceptable level of economic and legal precision.

While the process of defining markets is often complex and at times controversial, there is one constant across all jurisdictions when it comes to defining the geographic extent of a competition law or antitrust market.  That is, all such markets are local.  In Hong Kong, however, the Competition Commission appears to have erroneously taken an overly expansive view of this aspect of relevant markets, and this needs to be corrected.   Continue reading The Commission Must Rule-Out Its Overly Expansive View of Relevant Markets

Good Judgment Better than Good Guidelines

HONG KONG COMPETITION LAW – Last month, a dog was killed on the tracks of the MTR, Hong Kong’s super-efficient railway system.  Having found itself on the railway line, the dog attempted to climb back up to the platform.  MTR staff tried to help, using a chair and and other things – all the while reportedly telling bystanders not to interfere.

The end result was that the dog was killed by the next train arriving at the train station. This led to protesters criticising the MTR for not doing more to save the animal (and for not being more apologetic afterwards about what had happened).

The response from the MTR Corporation and the MTR workers’ union to these events – and to the public pressure on the company to address the shortcomings evident in the failure of its staff to deal with situation more effectively – included the promise of guidelines to cover future incidents.   Continue reading Good Judgment Better than Good Guidelines

Competition Commission Senior Management Team (Almost) Complete

HONG KONG COMPETITION LAW – Today is Dr Stanley Wong’s first day on the job as CEO of the Hong Kong Competition Commission. The announcement of his selection was made back on 21 July 2014, but today (3 September 2014) was specified to be his official starting date.

Dr Wong is the final member of the senior management team to physically arrive at the Commission’s offices in Wanchai.*   Continue reading Competition Commission Senior Management Team (Almost) Complete

Hong Kong Competition Law Gets Real at L’Oreal

HONG KONG COMPETITION LAW – In this post we discuss how seriously L’Oreal Hong Kong seems to be taking its future compliance responsibilities under the Competition Ordinance, Hong Kong’s new general competition law which is expected to come into effect next year.

What follows should be of interest to all competition law professional servicing clients in Hong Kong, but especially to the more proactive ones looking to undertake some targeted business development.   Continue reading Hong Kong Competition Law Gets Real at L’Oreal

Hong Kong’s Most Inefficient Competition Law Investigation

HONG KONG COMPETITION LAW – There have been many competition law court cases that have lasted years, even decades when appeal cases are taken into account. But in Hong Kong, just a preliminary investigation by competition officials – that is, a purely administrative review to determine if a full investigation should be undertaken – can take up to 21 months as we noted yesterday, or as we’ll discuss today in relation to another case, 9 months – with a further three years of formal investigations.

This record is held by the Communications Authority (CA) and its predecessor, the Broadcasting Authority, which took a total of 45 months to determine that contracts which the dominant free-to-air television service provider had with its acting and singing artistes, were materially anti-competitive within the “all TV viewing market” and the “TV advertising market” in Hong Kong.

We’re not going to discuss the merits of this case, although just the definitions of the above markets (ie the “all TV viewing market” and the “TV advertising market” in Hong Kong), would make any experienced competition lawyer or economist curious to know more.

What we want to cover in this post is the timeline for this investigation.  In doing so, we want to extend our previous discussion concerning how the CA took 21 months just to confirm its decision that no formal investigation was justified into allegations that Apple, operating alone or with others, had prevented purchasers of its iPhones and iPads from using these products on some Hong Kong mobile operators’ 4G/LTE network services.   Continue reading Hong Kong’s Most Inefficient Competition Law Investigation

Failed Complaint a Timely Reminder for the Competition Commission

HONG KONG COMPETITION LAW – On 30 June this year, the Hong Kong Communications Authority (CA) confirmed that it would not formally investigate a claim that Apple, either unilaterally or in a conspiracy with three mobile phone operators, had restricted the number of local mobile phone networks on which its newly-released iPhone and iPad devices would operate.

HKT, the major telecommunications operator in Hong Kong which we discussed previously in relation to its acquisition of CSL earlier this year, complained to the CA that because of Apple’s arrangements, its customers were unable to connect their new Apple products to HKT’s 4G/LTE mobile network.  It was alleged that this contravened the competition law provisions of the Telecommunications Ordinance (TO).

Ultimately, the case went nowhere.  But it took the CA more than 21 months to confirm its refusal to formally investigate HKT’s complaint, during which time there were countless letters, meetings and even court cases to spur the CA to act.

In our view, this apparent waste of time and resources – not to mention the frustration evident in the complainant’s efforts to move this case forward – could have been avoided had HKT had the right to initiate its own private legal action under the competition provisions of the TO.  But no such right exists under the TO, and nor does it exist under Hong Kong’s newly enacted general competition law.   Continue reading Failed Complaint a Timely Reminder for the Competition Commission