Leniency Under The Hong Kong Competition Ordinance

Dec 14, 2015

CPI Asia Column edited by Vanessa Yanhua Zhang (Global Economics Group) present:

Leniency Under The Hong Kong Competition Ordinance – By Sébastien J. Evrard, Scott D. Hammond, & Madeleine Healy¹ (Gibson, Dunn & Crutcher)

This contribution provides an overview of the “Leniency Policy for Undertakings Engaged in Cartel Conduct” (the “Leniency Policy”) published by the Hong Kong Competition Commission (“Commission”) on 19 November 2015.²

The Commission has made it clear that prosecuting cartels would be high up on its agenda for the enforcement of the Competition Ordinance (the “Ordinance”), which came into force on 14 December 2015.³

The experience in other jurisdictions shows that a transparent and well-functioning leniency program is a cornerstone for the effective prosecution of cartels.  The Leniency Policy contains many attractive elements, notably full immunity from fines for the first to report and a pledge by the Commission to treat the information provided by a leniency applicant confidentially.  However, it also contains elements that may prove a disincentive to self-report, such as a requirement to provide a written admission of wrongdoing, as well as aspects which may create uncertainty.  These potential flaws are partly a consequence of the framework imposed by the Ordinance, and it will be necessary to observe how the Commission applies its Leniency Policy before rendering a verdict on its predictability,