The Competition Commission is the authority responsible for enforcing the Competition Ordinance. In this role, it investigates suspected contraventions of the Ordinance. In appropriate cases, it pursues such contraventions in the Competition Tribunal.  The Tribunal then decides whether there has indeed been a contravention, and, if so, whether to impose financial penalties and other sanctions. 

It is understandable, therefore, that many businesses see the Competition Commission, and the Competition Ordinance itself, purely as a threat to their business (or an opportunity to complain about the practices of other businesses). 

While complying with the Ordinance and avoiding investigations by the Commission are important, it should be borne in mind that the Commission has several other roles which are important, and often useful, to businesses. These include conducting training sessions, giving guidance to businesses on compliance with the Ordinance, dealing with applications for clearance of commercial transactions, and advising the Government on competition issues.

Below are some recent examples of these Commission roles.

Training

The Commission regularly organizes training sessions and webinars for businesses and other stakeholders on competition law. In October alone, it announced a training course on competition law for businesses, lawyers and compliance professionals, to be held in November, and a webinar on the Competition Ordinance that will take place in January. 

In September, the Commission held two webinars: one for businesses generally, and another specifically for businesses in the hotel and travel agency sectors. 

Training of management and staff is an important part of any effective competition compliance programme. The Commission has stated that if a company does contravene the Ordinance, the fact that it has tried to ensure compliance through a compliance programme (including training) would be a mitigating factor when the Commission assesses the penalty that it recommends the Tribunal should impose. 

Businesses would therefore be well advised to take the opportunity of attending any such training sessions that the Commission offers. 

Guidance

The Commission issued a comprehensive set of guidelines on the Competition Ordinance when it came into force in December 2015. Since then, it has issued further guidelines from time to time on how the Competition Ordinance applies to particular commercial situations. The Commission calls these guidelines “Advisory Bulletins.” 

In July this year, for example, the Commission issued an Advisory Bulletin on how to ensure that the rules on admission to trade and professional associations do not contravene the Ordinance. Earlier Advisory Bulletins include one on how discussions and arrangements between businesses on wages and other terms and conditions of employment may contravene the Ordinance: an issue of particular relevance to companies’ HR departments.

Businesses should monitor the Commission’s website for any Advisory Bulletins it issues, as these are a very useful and important supplement to the initial guidelines issued in 2015.

Clearance

If businesses are proposing to enter into a commercial agreement which restricts competition, but which they believe generates efficiencies and consumer benefits which outweigh the harm to competition, they may apply for a Commission decision confirming this. If the Commission issues a decision, this gives them the security that they can implement the agreement, without fear of being challenged under the Competition Ordinance.

Similarly, if a business or trade association believes that there is a category of agreement which may restrict competition, but which they believe generates efficiencies and consumer benefits which outweigh the harm to competition, they may apply for a Commission decision confirming this, in the form of a block exemption order (BEO).

For example, the Commission issued a BEO for vessel-sharing agreements between container shipping lines in 2015. In August this year, the Commission launched a public consultation asking interested parties what it should do when the BEO expires in August next year. Should it: 

(a) renew the BEO in its current form (and if so, for how long);

(b)  renew the BEO subject to amendments (and if so, what amendments); or

(c) let the BEO expire?

Advice to Government 

The Commission advises the Government on any significant competition issues arising from Government proposals. For example, in September, the Commission made several recommendations to the Government on the latter’s proposal to renew the franchises of the incumbent bus operators, with a view to increasing competition in the market.

Conclusion

The Commission has a number of important roles which have an impact on businesses, apart from its role as enforcer of the Competition Ordinance. Business are advised to monitor the Commission’s activities in these other roles, as well as enforcement, to assess any potential benefits for – or threats to – their operations.