Can Hong Kong Maintain an Efficient Policing Of Competition Law Without Private Enforcement?

Can Hong Kong Maintain an Efficient Policing Of Competition Law without Private
Enforcement?
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Table of Contents
Chapter 1: Introduction....................................................................................................................4
1.1. Background Information and Problem Statement................................................................4
1.2. Research Rationale...............................................................................................................6
1.3. Thesis Statement...................................................................................................................6
1.4. Research Question................................................................................................................7
1.5. Research Aim and Research Objectives...............................................................................7
1.6. Dissertation Structure...........................................................................................................7
Chapter 2: Research Methodology................................................................................................10
2.1. Research Philosophy...........................................................................................................10
2.2. Research Approach.............................................................................................................10
2.3. Research Method................................................................................................................11
2.4. Data Collection Method......................................................................................................11
2.5. Data Analysis Method........................................................................................................12
2.6. Ethical Consideration..........................................................................................................12
Chapter 3: Competition Laws in Hong Kong................................................................................13
3.1. First Conduct Rule in Hong Kong......................................................................................13
3.2. Second Conduct Rule in Hong Kong..................................................................................16
3.3. Merger Rule in Hong Kong................................................................................................18
Chapter 4: Private Enforcement of Competition Laws in Hong Kong..........................................22
4.1. First Enforcement Action against Individuals in the Hong Kong Competition Commission
...................................................................................................................................................22
4.2. Private Enforcement of Competition Laws in Hong Kong................................................24
Chapter 5: Hong Kong Cannot Maintain an Efficient Policing Of Competition Law without the
Private Enforcement......................................................................................................................27
Chapter 6: Conclusions..................................................................................................................32
Bibliography..................................................................................................................................35
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Chapter 1: Introduction
1.1. Background Information and Problem Statement
In the world, Hong Kong has been a decisive economy. It creates major business opportunities,
which in turn, attracts the investors across the world to invest. Thus, this region has a large
number of business organizations operating, which in turn, leads to enhanced competition1. The
increase in competition, thus, influences many of the companies to integrate unfair practices to
attain competitive advantages. However, this severely affects the business environment in the
region and discourages investors largely2. Business competition is the contest amid varied
entities in a specific sector or industry having a free market so that at the best price, the top
variety of services or products can be delivered to the customers. It results to a better choice pf
services or products and price. In the context of Hong Kong, Competition Ordinance has been
enacted so that anti-competitive practices can be prohibited and competition can be promoted.
There are three forms of anti-competitive conducts, which are prohibited by the Competition
Ordinance in Hong Kong. These are the First Conduct Rule, the Second Conduct Rule, and the
Merger Rule3 that are together recognized as Competition Rules in Hong Kong. The Competition
Commission in Hong Kong has developed many infographics, videos, toolkits, and brochures,
which assist in understanding different forms of anti-competitive conduct. These significantly
help small and medium enterprises along with the trade associations to understand the
ordinance4.
1 Noah Sin, ‘Explainer: How Important Is Hong Kong To The Rest of China?’ (Reuters, 2019)
<https://www.reuters.com/article/us-hongkong-protests-markets-explainer/explainer-how-important-is-hong-kong-
to-the-rest-of-china-idUSKCN1VP35H> accessed 27 February 2020
2 South China Morning Post, ‘Competition Law Starts In Hong Kong Today’ (South China Morning Post, 2020)
<https://www.scmp.com/presented/business/topics/competition-ordinance-force/article/1890994/competition-law-
starts-hong> accessed 27 February 2020
3 Competition Commission (Hong Kong), ‘Overview’ (Competition & Anti-Competitive Practices, 2015)
<https://www.compcomm.hk/en/practices/what_is_comp/overview.html> accessed 04 March 2020
4 Competition Commission (Hong Kong), ‘Overview’ (Competition & Anti-Competitive Practices, 2015)
<https://www.compcomm.hk/en/practices/what_is_comp/overview.html> accessed 04 March 2020
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On December 14, 2015, the Hong Kong Competition Ordinance was enacted5. Presently, the
Competition Commission in Hong Kong has been working so that the enacted laws are enforced
in an effective way. Apart from the Competition Commission, the higher courts, as well as the
Competition Tribunal, enforce the Hong Kong Competition Ordinance. However, after the
enactment of Competition Ordinance, there had been a provision that restricted private 'stand-
alone' actions to seek remedies and relief. The Competition Commission plays a significant role
in promoting as well as educating individual parties to comply with the Competition Ordinance.
They also have the role to identify infringement cases along with forwarding the issue to the
Competition Tribunal. In Hong Kong, the Competition Tribunal plays the role of arbitrate
competition cases. The individual parties in business, who had witnessed any form of damage or
financial loss because of the breach of Competition Ordinance by other parties, can bring the
issue to the Competition Tribunal6.
The Competition Commission in Hong Kong on September 06 2018 had initiated its first
enforcement action against individuals in the renovation services industry. The Competition
Commission found two individuals Mr. Lam Po Wong and Mr. Chan Kam Shui along with three
companies involving Pacific View Engineering Limited, Kam Kwong Engineering Company
Limited, and Goldfield N&W Construction Company Limited were associated in an interest
group7. In August 2017, corresponding to a grievance from a public, the case was first noted. The
cartel has been that pricing of renewal services offered for an accommodation estate in Kowloon
5 Bird & Bird, ‘Navigating Hong Kong's Competition Law’ (In Focus, 2020) <https://www.twobirds.com/en/in-
focus/navigating-hong-kongs-competition-law> accessed 04 March 2020
6 Bird & Bird, ‘Navigating Hong Kong's Competition Law’ (In Focus, 2020) <https://www.twobirds.com/en/in-
focus/navigating-hong-kongs-competition-law> accessed 04 March 2020
7 John M. Hickin and Hannah C. L. Ha, ‘Hong Kong Competition Commission Commences its First Enforcement
Action against Individuals’ (Home, 2018)
<https://www.mayerbrown.com/en/perspectives-events/publications/2018/09/hong-kong-competition-commission-
commences-its-fir> accessed 29 February 2020
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at subsidized rates, was pre-coordinated by the three companies and the two individuals8. This
implies the importance of private enforcement in competition law for the effective maintenance
of fair competition in the existing business environment of the region. Thus, it can be stated that
Hong Kong cannot maintain an efficient policing of competition law without private
enforcement.
1.2. Research Rationale
The rationale for conducting this study is to address the identified issue presented in the previous
section. Specifically, it focuses on promoting fairness to the business practices in Hong Kong so
that more investors are encouraged to invest, which in turn, creates opportunities for its
development. The reason for conducting the study is to assess whether the private enforcements
are necessary for competition laws enacted in the region for ensuring justice to the stakeholders.
Furthermore, the execution of this study is the outcome of critically evaluating if Hong Kong can
maintain an efficient policing of competition law without private enforcement. This creates an
opportunity for further simplification or comprehensiveness of the existing competition laws in
the region as per the specific need of the business environment as well as the involved
stakeholders.
1.3. Thesis Statement
Based on the background information as well as the problem statement, a specific notion has
been developed. This has been presented through the below-mentioned thesis statement:
 Hong Kong cannot maintain an efficient policing of competition law without private
enforcement
8 John M. Hickin and Hannah C. L. Ha, ‘Hong Kong Competition Commission Commences its First Enforcement
Action against Individuals’ (Home, 2018)
<https://www.mayerbrown.com/en/perspectives-events/publications/2018/09/hong-kong-competition-commission-
commences-its-fir> accessed 29 February 2020
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1.4. Research Question
Based on the thesis statement, a specific research question has been prepared. This is so that the
required information is obtained and the validity of the thesis statement can be checked. The
specific research question has thus been presented below:
 Can Hong Kong maintain an efficient policing of competition law without private
enforcement?
1.5. Research Aim and Research Objectives
Based on the research, it is necessary to determine a specific research aim so that the study is
properly directed and the desired outcome is obtained. In this regard, the research has aimed at
determining whether Hong Kong can maintain an efficient policing of competition law without
private enforcement. To attain this aim comprehensively, it is important to construct some of the
research objectives, which have been presented below:
 To explore the competition laws in Hong Kong
 To investigate private enforcement of competition laws in Hong Kong
 To advise whether Hong Kong can maintain an efficient policing of competition law
without private enforcement
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1.6. Dissertation Structure
Chapter Overview and Areas Covered
Chapter 1: Introduction This chapter provided relevant background information and
problem statement has been explored, which has led to the
realization of the rationale for conducting the study. Besides, the
specific thesis statement, research question, research aim, and
research objectives have been determined and presented.
Chapter 2: Research Methodology This chapter presented the method or the process, through which
the research has been conducted. Specifically, the types of
secondary data have been collected and the way these have been
evaluated is detailed with proper justifications.
Chapter 3: Competition Laws in
Hong Kong
In this chapter, the existing secondary information relating to the
competition laws in Hong Kong have been presented.
Specifically, the information relating to the competition laws in
Hong Kong enforced in the region have presented.
Chapter 4: Private Enforcement Of
Competition Laws in Hong Kong
This chapter presented relevant secondary information about the
private or individual enforcement of competition laws in Hong
Kong
Chapter 5: Hong Kong Cannot
Maintain An Efficient Policing Of
Competition Law Without The
Private Enforcement
In this chapter, the information collected is analyzed. This
chapter has been highly focused on attaining the aim.
Chapter 5: Conclusions This chapter summarized the entire discussion to conclude
whether the thesis statement is valid.
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Chapter 2: Research Methodology
2.1. Research Philosophy
In this study, epistemology and interpretivism research philosophy have been integrated. The
reason behind the consideration of epistemology research philosophy in this study is that it is
highly focused on revealing the truth9. This philosophical conception relates to the subject matter
of the study, as the existing competition laws in Hong Kong are truth. These laws do not differ
based on the perception of individuals. Besides, in the context of epistemology, interpretivism
research philosophy has been specifically considered. This is mainly because it relates to the
subject matter of the study. Interpretivism research philosophy focuses on logically interpreting
the information or facts10. Similarly in this study, the information relating to the competition laws
and the private enforcements laws in Hong Kong is logically interpreted to identify if the region
can maintain an efficient policing of the former without the enforcement of the latter.
2.2. Research Approach
In this study, the inductive approach has been integrated. The reason behind this is that it highly
relates to the aim along with the objectives of the study. An inductive approach initiates with the
few observations relating to a specific topic, which leads to the development of a particular
notion. The developed notion or assumption is further justified and cross-validated with varied
information to eventually develop a theory11. A similar approach has been followed in this study,
as it initiated with few observations in the background information and problem statement, which
in turn led to the development of the notion or thesis that “Hong Kong cannot maintain an
efficient policing of competition law without the enforcement of privacy laws”. Furthermore,
9 Pranas Žukauskas, Jolita Vveinhardt and Regina Andriukaitienė, Management Culture and Corporate Social
Responsibility (BoD – Books on Demand 2018)
10 Joseph Muthiani Malechwanzi, Effects of Engagement and Resources on Learning Outcomes in Vocational
Colleges: Emerging Research and Opportunities: Emerging Research and Opportunities (IGI Global 2019)
11 Karen Glaser, Inductive or Deductive?: The Impact of Method of Instruction on the Acquisition of Pragmatic
Competence in EFL (Cambridge Scholars Publishing 2014)
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