Hong Kong’s First Decision on the Exclusion of Competition Rules
The Hong Kong Competition Commission has recently published its first decision on the exclusion of the competition rules under the Competition Ordinance. The Commission found that the Code of Banking Practice is not excluded from the prohibition against anticompetitive arrangements as it is not legally required under Hong Kong law.
The decision is obviously of particular note for the financial services sector. However, it is of wider significance to businesses in Hong Kong in illustrating how the local competition authority narrowly interprets and applies the Competition Ordinance’s statutory exclusions.
Specifically, industry codes or arrangements that are merely encouraged by government entities are still likely to fall within the ambit of the competition rules. Whilst some sectors may have a close relationship with Government, mere oversight of an industry or encouragement of a practice by the Government is insufficient to exclude its arrangements from scrutiny.