Hong Kong’s Competition Ordinance (Cap. 619) in 2026: the First Conduct Rule, the Second Conduct Rule, the Merger Rule, Commission Investigations, Penalties of up to 10% of Turnover, Director Disqualification and Competition Tribunal Practice 2017–2026

The Competition Ordinance (Cap. 619) is Hong Kong’s principal competition statute: Ordinance No. 14 of 2012, passed by the Legislative Council (LegCo) on 14 June 2012, gazetted on 22 June 2012 and brought fully into operation on 14 December 2015. It lays down three competition rules. The First Conduct Rule (section 6) prohibits agreements, concerted practices and decisions of associations whose object or effect is to prevent, restrict or distort competition in Hong Kong; the Second Conduct Rule (section 21) prohibits an undertaking with a substantial degree of market power from abusing that power; and the merger rule (Schedule 7) prohibits mergers that substantially lessen competition, but applies only where a party holds a carrier licence under the Telecommunications Ordinance (Cap. 106). The Competition Commission investigates and brings proceedings, while findings of contravention, pecuniary penalties and disqualification orders are made by the Competition Tribunal, a court composed of judges of the Court of First Instance. The Commission itself has no power to fine: that is what sets Hong Kong apart from the EU, the United Kingdom, Singapore and the UAE, where the regulator imposes the sanction. A penalty under section 93 is capped at 10% of the undertaking’s Hong Kong turnover for each year of the contravention (up to three years); a director of the contravening company may be disqualified for up to five years (section 101); and obstructing an investigation is a criminal offence carrying a fine of up to HK$1,000,000 and two years’ imprisonment (sections 53–54). In ten years of enforcement the Commission has brought 17 cases before the Tribunal, from the first case, Nutanix, in March 2017 to the Technology Voucher Programme cartel case in June 2026; the largest agreed sanction is the HK$150,000,000 that ATAL Building Services Engineering has undertaken to pay for its part in two air-conditioning cartels.

Key facts. First: Cap. 619 commenced in stages — the Commission was established on 18 January 2013 (L.N. 177 of 2012), the Tribunal on 1 August 2013, sections 3–5 on statutory bodies on 17 April 2015 (L.N. 39 of 2015), and the conduct rules and the merger rule on 14 December 2015 (Competition Ordinance (Commencement) (No. 2) Notice 2015, L.N. 156 of 2015); the current e-Legislation version is dated 29 November 2020 and no substantive amendment has been made since. Second: the First Conduct Rule does not apply to agreements between undertakings whose combined turnover for the financial year does not exceed HK$200,000,000, and the Second Conduct Rule does not apply to an undertaking with turnover of up to HK$40,000,000 (Schedule 1, sections 5–6), but the first threshold gives no protection against liability for serious anti-competitive conduct — price fixing, market sharing, output restriction and bid-rigging. Third: the Tribunal calculates penalties by the four-step method of Competition Commission v W. Hing Construction Co Ltd [2020] HKCT 1: base amount = value of sales × gravity percentage (15–30% for cartels) × duration multiplier, then aggravating and mitigating factors, the statutory cap of 10% of turnover, and a cooperation discount; in the cleansing services cartel case [2025] HKCT 1 that arithmetic produced HK$10,960,000 for one company and HK$11,300,000 for the other. Fourth: the first criminal conviction under Cap. 619 came on 28 February 2025 — two months’ imprisonment for an employee of a cleansing company who tried to delete documents during a search (section 53(1)(a)); in Tribunal proceedings seven directors have been disqualified for periods from one year and ten months to three years. Fifth: on 4 March 2026, in Competition Commission v Gray Line Tours of Hong Kong Ltd & Ors [2026] HKCT 1, the Tribunal dismissed the first claim against a cartel “facilitator”: an intermediary that is not active on the market is liable under section 91 (involvement in a contravention), not section 6, and the Commission, having pleaded only section 6, lost the case with costs.

What the Competition Ordinance Cap. 619 Regulates: A Map of the Three Competition Rules and the Tools for Enforcing Them

The three competition rules are, under the definitions in section 2 of Cap. 619, the First Conduct Rule, the Second Conduct Rule and the merger rule; the first two are together called the conduct rules. Each rule has its own addressees, its own exclusions and its own set of enforcement tools. The table below maps the regime in one place; each row is developed in the sections that follow.

Author’s assessment: the architecture of Cap. 619 is judicial rather than administrative, and that is its most important practical feature. In the EU, the United Kingdom, Singapore and the UAE the regulator itself finds the contravention and imposes the penalty, subject to review by a court. In Hong Kong the Commission investigates and prosecutes, but the contravention is established by the Tribunal to the criminal standard (beyond reasonable doubt), adopted in Competition Commission v Nutanix Hong Kong Ltd [2019] HKCT 2 on the authority of the Court of Final Appeal in Koon Wing Yee v Insider Dealing Tribunal. The Commission sought to replace it with the civil standard, but in the first appeal ever brought from the Tribunal — Competition Commission v W. Hing Construction Co Ltd [2021] HKCA 877 — the Court of Appeal declined to decide the question, holding that the argument about frustrating the enforcement objective is better tested in a case where the choice of standard has a real rather than notional impact. Two things follow for business: a dispute with the Commission is full-scale litigation with discovery and cross-examination, and the Commission has a strong incentive to close cases by agreement through the Kam Kwong procedure and the Cooperation Policy, since every contested case takes years. Nutanix ran almost four years from the originating notice (23 March 2017) to the penalties (16 December 2020), and the Commission’s legal costs had reached HK$18,800,000 by June 2020.

The Legal Framework: Tiers of Regulation, the Enactment and Commencement Chain, Subsidiary Legislation and the Commission’s Policies

The legal framework of Hong Kong competition law has four tiers: the Competition Ordinance (Cap. 619) itself with seven pieces of subsidiary legislation (Cap. 619A–619G); six Guidelines issued by the Commission jointly with the Communications Authority under section 35; six Commission policies on how it enforces the law; and the case law of the Tribunal, the Court of Appeal and the Court of Final Appeal. The tiers differ in legal force. The Ordinance and the subsidiary legislation bind everyone; the Guidelines bind the Commission as a statement of its approach but do not bind the Tribunal; and the policies (on leniency, recommended penalties and commitments) are the Commission’s own rules, which the Tribunal takes into account but by whose calculation it is not bound — in Prudential Hotel (BVI) Ltd [2025] HKCT 2 the Tribunal kept the four-step method but adopted a different base figure and imposed a penalty of HK$104,000 instead of the HK$1,250,000 the Commission had proposed.

The enactment chain took almost six years: the Competition Bill was introduced by the Secretary for Commerce and Economic Development and gazetted on 2 July 2010, had its first reading on 14 July 2010, a Bills Committee was formed on 8 October 2010, the second reading debate ran from 1 to 13 June 2012, and the third reading and passage came on 14 June 2012. A Government press release of 16 July 2015 announced the date of full commencement — 14 December 2015 — together with the gazettal of the Competition (Fees) Regulation; the Commission issued the final Guidelines on 27 July 2015, four and a half months before the rules began to apply. The commencement notices were tabled in LegCo for negative vetting: L.N. 177 of 2012 on 28 November 2012, L.N. 39 of 2015 on 25 February 2015 and L.N. 155–156 of 2015 on 14 October 2015, as the Council agendas record.

Author’s assessment: the absence of amendments since 2020 is not a sign of stagnation but a consequence of the judicial model. Every key question of application — the standard of proof, the penalty method, a head contractor’s liability for its subcontractor, the admissibility of consent orders, the liability of an intermediary — has been settled not by the legislature but by the Tribunal and the Court of Appeal between 2019 and 2026. A company assessing its exposure under Cap. 619 cannot stop at the statute: without Nutanix, W. Hing, Kam Kwong and Gray Line the picture is incomplete. The registration procedure and the basic obligations on which competition law is layered are described in Hong Kong Company Registration 2026: Requirements, Procedure, Taxes, and Annual Compliance.

Who Is Caught by Cap. 619: The Concept of an Undertaking, the Single Economic Unit, Statutory Bodies and Extraterritorial Reach

An undertaking is, under section 2(1) of Cap. 619, “any entity, regardless of its legal status or the way in which it is financed, engaged in economic activity”, including a natural person engaged in economic activity. The definition is borrowed from EU practice and means that the addressee of the rules is not the legal person as such but the economic actor: a sole proprietor, a partnership, a company, a group of companies acting as one, and even a non-profit body in respect of its economic activity. An agreement under section 2(1) is “any agreement, arrangement, understanding, promise or undertaking, whether express or implied, written or oral, and whether or not enforceable”; no contract is needed — an exchange of intentions is enough.

The single economic unit is the concept under which companies in one group, or a contractor and its subcontractor operating under common control, count as one undertaking. The Court of Appeal in Competition Commission v W. Hing Construction Co Ltd & Ors [2022] HKCA 786 of 2 June 2022 applied it strictly: head contractors under the Housing Authority’s Decoration Contractor System that had “lent” their licences to subcontractors for a fixed fee (W. Hing for HK$200,000) formed a single undertaking with those subcontractors and were liable for the contravention in full. The Tribunal at first instance had reduced their penalties in recognition of their limited role (by a third in W. Hing, by 30% and 50% in Fungs); the Court of Appeal set those reductions aside and raised the penalties of W. Hing from HK$670,000 to HK$1,030,000, Tai Dou from HK$420,000 to HK$656,000 and Wide Project from HK$740,000 to HK$1,135,000, and in the parallel Fungs case those of Fungs E&M Engineering from HK$598,000 to HK$855,000 and Dao Kee from HK$341,000 to HK$682,000. The practical lesson is that passing a licence or a brand to a third party does not separate a company from that party’s contraventions. The same logic reaches the partners of a firm: in the first appeal ever brought from the Tribunal — Competition Commission v W. Hing Construction Co Ltd [2021] HKCA 877 (judgment 5 May 2021, reasons 18 June 2021) — two named partners of the firm Tai Dou argued that they had taken no personal part in the collusion and had no intent; the Court of Appeal rejected that, holding that a contravention of a conduct rule is not a criminal offence requiring proof of personal mens rea and that the partners’ liability followed from their capacity as partners.

Statutory bodies are taken outside Parts 2, 4 and 6 of the Ordinance and Schedule 7 by section 3 — that is, outside the conduct rules, investigations and sanctions — unless a regulation made by the Chief Executive in Council brings them back in. The Competition (Application of Provisions) Regulation (Cap. 619A) applies the rules to only six bodies: Ocean Park Corporation, Matilda and War Memorial Hospital, Kadoorie Farm and Botanic Garden Corporation, The Helena May, the Federation of Hong Kong Industries and its general committee. The converse regulation — the Competition (Disapplication of Provisions) Regulation (Cap. 619B) — removes seven exchange-group entities from the rules: The Stock Exchange of Hong Kong Limited, Hong Kong Futures Exchange Limited, Hong Kong Securities Clearing Company Limited, HKFE Clearing Corporation Limited, The SEHK Options Clearing House Limited, OTC Clearing Hong Kong Limited and Hong Kong Exchanges and Clearing Limited. For private business this means that a statutory-body counterparty (the Housing Authority as a procurer, for example) is itself outside the rules, while contractors that rig its tenders are fully liable — Housing Authority tenders produced the largest single group of cases in 2017–2021 — four of nine.

Extraterritorial reach is provided for by sections 8 and 23: the First Conduct Rule applies even if the agreement is made or given effect to outside Hong Kong and even if a party is outside Hong Kong, provided the object or effect concerns competition in Hong Kong; the same applies to conduct abroad under the Second Conduct Rule. In Linde HKO Ltd the German company Linde GmbH is a respondent alongside the Hong Kong company, and in the tender cartel cases the Commission has pursued foreign distributors. Turnover for the Schedule 1 thresholds is measured by the undertaking’s worldwide gross revenues, while the penalty cap under section 93(4) looks only at revenues obtained in Hong Kong.

Author’s assessment: the wide concept of an undertaking shifts risk onto people, not only companies. A natural person carrying on a business is an undertaking in their own right and can be fined directly — in Kam Kwong the individual subcontractor Lam Po Wong was fined HK$280,000, and in Multisoft three individuals were fined between HK$32,000 and HK$242,000. An employee or director of a contravening company is exposed through section 91 as a person “involved in a contravention” and through disqualification. A company entering the Hong Kong market through a local partner should remember that a partner who is a natural person, and that partner’s dealings with competitors, are its own competition-law risk and not merely a matter of the commercial contract. The form of presence chosen — an own company or working through a local partner — shapes that risk too: company registration with UPPERSETUP.

The First Conduct Rule (Section 6): Which Agreements Are Prohibited, What Counts as Serious Anti-Competitive Conduct, and How the HK$200,000,000 Threshold Works

The First Conduct Rule is the prohibition in section 6(1) of Cap. 619: an undertaking must not (a) make or give effect to an agreement, (b) engage in a concerted practice, or (c) as a member of an association of undertakings make or give effect to a decision of the association, if the object or effect of the agreement, practice or decision is to prevent, restrict or distort competition in Hong Kong. Section 7 adds that one of several objects is enough and that the object may be inferred from the content of the agreement and the circumstances; actual harm need not be proved for “object” restrictions. The Guideline on the First Conduct Rule of 27 July 2015 treats as object restrictions price fixing, market sharing, output restriction, bid-rigging, the exchange between competitors of private information on future prices (paragraph 6.40) and, in most cases, resale price maintenance (RPM; paragraphs 3.8 and 6.71–6.84).

Serious anti-competitive conduct comprises the four forms named in section 2(1): fixing, maintaining, increasing or controlling the price for the supply of goods or services; allocating sales, territories, customers or markets; fixing, maintaining, controlling, preventing, limiting or eliminating production or supply; and bid-rigging, defined in section 2(2) as an agreement not to bid, to withdraw a bid or to submit bids arrived at by agreement, without the knowledge of the person calling for bids. The classification has three consequences: the exclusion for agreements of lesser significance does not apply; the Commission may go to the Tribunal without a prior warning notice (section 82 requires one only for non-serious contraventions); and participants may apply for leniency under section 80 — the Commission’s policy covers precisely “cartel conduct”. The Commission places employer agreements on wages and on not hiring each other’s staff in the same category: its Advisory Bulletin “Competition concerns regarding certain practices in the employment marketplace” of 9 April 2018 treats fixing compensation as price fixing and no-poaching agreements as market sharing; the employment-law side of hiring in Hong Kong is covered in The Employment Ordinance (Cap. 57) in 2026: the 417/468 Rule, the End of MPF Offsetting, and a HKD 43.1 Minimum Wage.

Vertical agreements — contracts between a supplier and a distributor — fall within the First Conduct Rule where the distributor is independent (paragraph 2.12 of the Guideline); restrictions in a contract with a genuine agent that bears no financial or commercial risk (paragraphs 2.14–2.16) do not. The first RPM case — Competition Commission v The Tien Chu (Hong Kong) Company Limited (CTEA 3/2022, filed 15 September 2022) — was still undecided in September 2026, so Hong Kong has no judicial ruling on RPM yet and the Commission works from the Guideline. For importers and distributors building a supply chain through Hong Kong this means reviewing contractual terms on resale prices, exclusive territories and online sales before launch; the customs and licensing side is covered in Importing and exporting in Hong Kong in 2026: declarations, the free port regime and licensed goods.

Author’s assessment: the HK$200,000,000 threshold creates an illusion of safety among small businesses.The threshold protects only against “soft” infringements — joint purchasing, say, or the exchange of historical data — whereas every First Conduct Rule case the Commission brought between 2017 and 2026, other than the RPM case (Tien Chu), concerned serious conduct, where the threshold does not operate: Housing Authority renovation contractors, IT distributors, cleansing companies, ticket sellers, building maintenance contractors. The penalty in Quantr was HK$37,702.26 on a value of sales below HK$150,000 — the size of the business affects the amount of the penalty, not the fact of liability.

The Second Conduct Rule (Section 21): Substantial Market Power without a Market-Share Threshold, Forms of Abuse and the First Case, Linde

The Second Conduct Rule is the prohibition in section 21(1) of Cap. 619: an undertaking that has a substantial degree of market power in a market must not abuse that power by engaging in conduct that has as its object or effect the prevention, restriction or distortion of competition in Hong Kong. Section 21(2) gives two examples of abuse — predatory behaviour towards competitors and limiting production, markets or technical development to the prejudice of consumers; section 21(3) lists the factors for assessing market power — market share, the power to make pricing and other decisions, barriers to entry and any other matters set out in the Guidelines. The test of a “substantial degree of market power” is deliberately set below the European standard of “dominance”: the statute does not require the undertaking to be the only major player.

There is no market-share threshold in the statute, and the Guideline does not introduce one. The Guideline on the Second Conduct Rule states in terms that “a high market share does not necessarily imply a substantial degree of market power” and defines that power as the ability profitably to sustain prices above the competitive level, or output or quality below it, for a sustained period — around two years as a rule of thumb. The Schedule 1 section 6 exclusion for undertakings with turnover of not more than HK$40,000,000 is the only numerical benchmark in the regime, and the Guideline expressly cautions that exceeding it creates no presumption of market power. An abuse assessment in Hong Kong is therefore always fact-specific: the market, barriers, the evolution of shares, the behaviour of customers.

Forms of abuse described in the Guideline: predatory pricing — prices below average variable cost are “unlikely to be economically rational” and may indicate an exclusionary purpose without proof of actual effects; tying and bundling; a margin squeeze by a vertically integrated company; refusal to deal — permitted as a general rule and abusive only “in very limited or exceptional circumstances”, where the input is indispensable and its owner competes downstream; and exclusive purchasing obligations that foreclose competitors. The Second Conduct Rule has no efficiency defence equivalent to the Schedule 1 section 1 exclusion for agreements, but an undertaking may argue that its conduct causes no net harm to consumers and that its benefits are passed on to them.

The first abuse case is Competition Commission v Linde HKO Limited, Tse Chun Wah and Linde GmbH (CTEA 3/2020), filed on 21 December 2020 and concerning the medical gases market: on the Commission’s case, between October 2015 and January 2018 (liability under section 21 being possible only from 14 December 2015) Linde ceased or limited the supply of medical gases to MGI (Far East) Limited — the only competitor on the downstream market for the maintenance of hospital medical gas pipeline systems — and imposed unjustified terms on it, so as to keep it away from public hospital contracts; the Commission seeks penalties and a disqualification order of up to five years against the general manager. As of September 2026 the Commission’s case page lists only the procedural decision of 7 October 2021 ([2021] HKCT 3) on discovery under Rule 24 of the Competition Tribunal Rules; the substantive judgment is awaited, and until it arrives Hong Kong has no judicial precedent on the Second Conduct Rule. In ten years the Commission has never accepted commitments under section 21: the matters that look from the outside like platform market-power cases — the commitments of foodpanda (Delivery Hero Food Hong Kong) and Deliveroo of 29 December 2023 and of Keeta of 17 June 2026 on exclusivity, price parity and restrictions on restaurants switching platforms, and the changes to warranty terms by seven car distributors on 10 October 2022 — were framed as concerns under the First Conduct Rule, that is, as vertical terms in contracts, and in the notice accepting the food delivery platforms’ commitments the Commission stated in terms that it “has not come to any conclusion as to whether the Parties have a substantial degree of market power”.

Author’s assessment: in Hong Kong the conduct of a strong player is more often assessed through section 6 than through section 21, and that changes the defence strategy. To apply the Second Conduct Rule the Commission must prove market power — a long and contested analysis that has kept Linde in the Tribunal for more than five years by September 2026; to apply the First Conduct Rule to exclusivity or price parity in a platform’s contracts with restaurants, the contracts themselves are enough. A company with a strong position in a narrow Hong Kong market — a distributor with an exclusive, an infrastructure operator, a platform — should therefore test its contracts with counterparties against section 6 rather than only asking whether it is “dominant”; in Keeta it was the contractual terms that became the subject of a two-stage approach — voluntary amendments (announced 12 November 2025, made in early April 2026) and a formal section 60 commitment running to 28 December 2026.

The Merger Rule (Schedule 7): Why Merger Control in Hong Kong Covers Only Telecommunications, and How the CMHK — HKBN Transaction Was Handled in 2025

The merger rule is the prohibition in section 3 of Schedule 7 to Cap. 619: an undertaking must not, directly or indirectly, carry out a merger that has, or is likely to have, the effect of substantially lessening competition in Hong Kong. Schedule 7 treats as a merger the amalgamation of previously independent undertakings, the acquisition of direct or indirect control of an undertaking or part of it, the acquisition of assets, and the creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity; control means the ability to exercise decisive influence. The key limitation is section 4 of Schedule 7: the rule applies only where at least one of the participating undertakings holds, or controls an undertaking that holds, a carrier licence under the Telecommunications Ordinance (Cap. 106). Mergers in retail, finance, logistics, property or construction are outside merger control altogether, and no industry in Hong Kong has a mandatory merger notification.

Jurisdiction over telecommunications and broadcasting is concurrent. Sections 159–161 of Cap. 619 confer the Commission’s powers on the Communications Authority in respect of licensees under the Telecommunications Ordinance and the Broadcasting Ordinance (Cap. 562); the Guidelines are issued by both bodies jointly, and under sections 4–5 of Cap. 619G the fee for an application transferred to the Communications Authority is refunded and replaced by reimbursement of the Authority’s actual costs up to the specified amount. The time limits are shorter than under the conduct rules: the Commission may commence an investigation of a merger only within 30 days after it became aware, or ought to have become aware, of the merger (Schedule 7, section 7), and must bring proceedings within six months after completion or after becoming aware of it (section 92); the parties may apply before the transaction for a decision that an exclusion applies (Schedule 7, section 11) for a fee of HK$500,000.

The CMHK — HKBN transaction shows how the rule works in practice. On 1 August 2025 the Communications Authority published a statement accepting commitments from China Mobile Hong Kong Company Limited in connection with its acquisition of HKBN Ltd.: both parties hold carrier licences, so the transaction fell within Schedule 7. The Authority identified risks in two markets: in fixed local access network services, a unilateral effect from building access constraints on competitors, with an increased risk of coordinated effects; and in mobile backhaul services, a risk of vertical input foreclosure of competing mobile operators. The Authority describes CMHK as one of the major mobile network operators and a major fixed network operator, and HKBN as one of the major fixed network operators. The section 60 commitments included facilitating operators’ access to HKBN’s in-building systems, preserving the terms of HKBN’s existing mobile backhaul contracts with mobile operators for three years after the merger, a group-wide procurement commitment and six-monthly reports to the Office of the Communications Authority; the Authority then declined to open an investigation. HKBN’s own acquisition of WTT Holding Corp. in 2019 had followed a similar path.

Exemption from the merger rule is available on two grounds: economic efficiencies that outweigh the adverse effects of any lessening of competition (Schedule 7, sections 8 and 11), and an order of the Chief Executive in Council exempting a merger for “exceptional and compelling reasons of public policy” (Schedule 7, section 9). When the Ordinance was enacted in 2012 the Government deliberately confined merger control to telecommunications, leaving any extension for the future; as of September 2026 no bill for cross-sector merger control has been introduced in LegCo.

Author’s assessment: the absence of general merger control is a real advantage of Hong Kong for M&A, but not an indulgence. A transaction outside telecommunications requires no notification, no waiting period and no fee, which saves months compared with the EU, where pre-notification is mandatory above the turnover thresholds, and the UAE, where mandatory notification thresholds have applied since 31 March 2025. But the agreements that accompany a deal — non-competes, pre-closing information exchange, joint purchasing — are assessed under the First Conduct Rule like any other, and the combination itself may create a substantial degree of market power whose abuse after closing falls under section 21. The comparison of the Hong Kong and UAE regimes for holding structures that use both jurisdictions continues in Hong Kong + UAE: Dual Structure for International Business 2026 — The Complete Guide.

Exclusions and Exemptions: Schedule 1, Commission Decisions on Application, the Block Exemption for Vessel Sharing Agreements until 2031 and the Fees under Cap. 619G

Exclusions are the list in Schedule 1 that takes six categories outside the conduct rules: agreements enhancing overall economic efficiency (section 1 — on four conditions: a contribution to improving production or distribution or to technical or economic progress, a fair share of the benefits for consumers, restrictions that are indispensable, and no elimination of competition in a substantial part of the market); agreements and conduct needed to comply with legal requirements (section 2); services of general economic interest (section 3); mergers (section 4 — agreements forming part of a merger are assessed under Schedule 7, not the conduct rules); agreements of lesser significance (section 5, HK$200,000,000); and conduct of lesser significance (section 6, HK$40,000,000). Exemptions are two executive instruments: an order of the Chief Executive in Council for exceptional and compelling reasons of public policy (section 31), and an order to avoid a conflict with Hong Kong’s international obligations (section 32).

A Commission decision on application is the mechanism of sections 9–11 (for the First Conduct Rule) and 24–27 (for the Second Conduct Rule): an undertaking may ask the Commission to decide that an agreement or conduct is excluded or exempt. The Commission is only required to consider an application that “poses novel or unresolved questions of wider importance or public interest”, that raises a question not clarified by existing case law or decisions, and that can be decided on the information provided (section 9(2)); it may decline hypothetical questions. A decision binds the Commission while the circumstances remain unchanged and may be rescinded. In ten years the Commission’s register records only two decisions under section 11(1) — of 15 October 2018 on the Code of Banking Practice and of 26 September 2019 on an industry survey of pharmaceutical sales; both were made on applications by associations rather than individual companies, and business otherwise relies on self-assessment against the Guidelines.

A block exemption order is an order of the Commission under section 15 extending the Schedule 1 section 1 exclusion to a category of agreements; the statute requires the order to specify a review date no later than five years after it is made, and section 20 lets the Commission vary or revoke it. The only order in force concerns vessel sharing agreements in liner shipping: the Competition (Block Exemption for Vessel Sharing Agreements) Order 2017 was made on 8 August 2017 and varied by orders of 7 July 2022 and 31 July 2026, the latter — after consultations on 7 August 2025 and 11 June 2026 — extending it to 8 August 2031 on the existing terms. The order exempts operational arrangements such as the exchange of vessel slots and the coordination of sailing timetables on two conditions: the parties’ combined market share does not exceed 40% (up to 45% for no more than two consecutive years) and any party may withdraw on reasonable notice without penalty. The exemption expressly does not extend to price fixing, the issuing of price recommendations or the exchange of price information, to the limitation of capacity or sales other than adjustments for fluctuations in demand, or to the allocation of markets or customers.

Author’s assessment: the application system in Hong Kong is built as an exception, not a rule, and should not be relied on. Fees of up to HK$500,000, the Commission’s right to decline an application and two decisions in ten years — both on applications by trade bodies — mean that the only workable route for most companies is self-assessment against the Guidelines, with a documented efficiency justification. The single block exemption in a decade — for liner shipping — confirms that the Commission uses the tool only where industry agreements are backed by international practice. For distribution, franchise and licensing agreements a company should rely on the passages of the Guideline on the First Conduct Rule dealing with vertical agreements and agents, not on the prospect of an individual decision.

The Commission’s Investigation Powers and Criminal Liability for Obstruction: Sections 39–55 and the First Conviction of 2025

A Commission investigation is, under section 39 of Cap. 619, an inquiry the Commission may open only where it has reasonable cause to suspect a contravention of a competition rule; the triggers are complaints (section 37 allows trivial, frivolous, vexatious and misconceived complaints to be rejected), leniency applications, the Commission’s own monitoring and referrals from other agencies. The Commission has three compulsory tools: a requirement to produce documents and information (section 41), a requirement to attend and answer questions on the record (section 42) and a requirement to verify information by statutory declaration (section 43). Premises may be searched only under a warrant issued by a judge of the Court of First Instance on the sworn application of an authorised officer (section 48); under section 50 the officers executing the warrant may take possession of documents and electronic devices, require explanations of documents and require assistance in accessing information stored in electronic form.

The criminal offences are in sections 52–55 and 105 and are tried summarily by the magistrates’ courts or on indictment in the higher courts, not by the Tribunal; liability falls on the person who committed the act — an employee, a director or the company itself.

Searches have become the main tool in construction and building maintenance cartel cases. Since 2024 the Commission has conducted them jointly with the Independent Commission Against Corruption (ICAC) and the Police: the first joint operation on 18 April 2024 ended with 20 arrests, the second followed on 26 August 2024, and on 18 December 2024 the Commission and the ICAC signed a memorandum of understanding. In 2025–2026 came searches in cases covering 25 renovation projects (10 September 2025), 17 housing estates (29 January 2026) and 28 projects across 12 districts with contracts of around HK$500,000,000 (12 August 2026), and on 26–27 August 2026 Operation “Iron Pact” with the ICAC and the Police’s Organized Crime and Triad Bureau covered 39 premises and ended with 50 arrests of people aged 24 to 77: the Commission’s part concerned 23 housing estates in 8 districts with contracts of around HK$300,000,000, the ICAC’s part three projects worth HK$200,000,000, including bribery of consultants and owners’ corporation members.

Obstruction also aggravates the civil penalty. In the cleansing services cartel case [2025] HKCT 1 the Tribunal applied paragraph 2.14(g) of the Policy on Recommended Pecuniary Penalties for the first time and increased the penalty of Hong Kong Commercial Cleaning Services by 50% because its staff had deleted documents and links during the search on 23 September 2019 — the same act for which the employee was convicted. Harris J held that “deliberate destruction of relevant electronic documents as opposed to mere non-cooperation” justified the uplift as a deterrent.

Author’s assessment: the criminal side of Cap. 619 is aimed not at the cartel but at conduct during the search. In Hong Kong, unlike the United Kingdom or the United States, cartel participation is not itself a crime, so the only real risk of imprisonment arises on the day of the search — from deleting messages, “losing” a laptop or failing to attend an interview. The first conviction in 2025 showed that the Commission will take such cases to court even where the damage is slight (five deleted documents). A staff protocol for a search — do not delete, do not hide, do not give false explanations, call in the company’s lawyers — should be part of every Hong Kong company’s compliance programme.

How a Case Ends without a Trial: Warning Notices, Infringement Notices, Section 60 Commitments, Leniency and the Cooperation Policy

The pre-trial resolution tools are the five mechanisms by which Cap. 619 and the Commission’s policies allow a case to be closed without a full hearing in the Tribunal: the warning notice, the infringement notice, commitments, the leniency agreement and cooperation with an agreed penalty. Which tool applies depends on the rule contravened, on whether the conduct was serious and on who came to the Commission first.

The Kam Kwong procedure is the judicial mechanism without which cooperation cannot work. The Tribunal does not grant a declaration of contravention by consent: in Competition Commission v Kam Kwong Engineering Company Ltd [2020] HKCT 3 (decision 3 June 2020, reasons 17 July 2020) Harris J allowed the Carecraft procedure from director disqualification practice to be used — the parties file a statement of agreed facts and a joint application under Rule 39 of the Competition Tribunal Rules, and the Tribunal satisfies itself that the facts amount to a contravention and imposes a penalty which it is free to vary. The Cooperation Policy requires the undertaking to sign the statement of facts within 10 working days after the Commission indicates the maximum penalty (paragraph 2.7). In [2025] HKCT 4 the Tribunal added that the sanctioned payment mechanism under Order 22 of the Rules of the High Court does not work in such proceedings, because only the Tribunal can determine a contravention and a penalty, and described paragraph 25(e) of Competition Tribunal Practice Direction 1 as “misleading”.

Leniency in Hong Kong is narrow in scope and wide in effect. Full immunity is available only to the first undertaking to report the cartel, and only if it did not coerce others and was not the clear single ringleader; the immunity extends to current staff and directors who cooperate (paragraph 2.16), but it does not protect against follow-on claims by victims or against criminal liability for obstruction. An application is made through the hotline +852 3996 8010 or to Leniency@compcomm.hk; the marker is granted at the time of the call and at least 30 days are allowed to perfect it. A refusal of a marker can be challenged: according to Slaughter and May’s review of 30 December 2025, Midland Realty, refused a marker in the estate agency commissions case, has applied for judicial review of that decision.

Author’s assessment: the economics of cooperation in Hong Kong are rigidly tied to the order of arrival.The difference between the first and the second applicant is the difference between zero and tens of per cent of the penalty, and between cooperating before and after proceedings up to a further 20 percentage points; in the cleansing case an admission less than five months before trial earned a discount of only 9%. A company that finds signs of a cartel in its own business — in pre-deal due diligence, say, or on a change of management — has to decide on an approach to the Commission within days rather than months, because its counterpart in the cartel is making the same decision in parallel.

Competition Tribunal Penalties and the Liability of Individuals: The 10% Cap, the Four-Step Method, the Calculation in the Cleansing Services Case and Director Disqualification

A pecuniary penalty is, under section 93(1) of Cap. 619, the sum the Tribunal, on the Commission’s application, orders a person to pay to the Government for contravening a competition rule or being involved in a contravention; the amount is “any amount the Tribunal considers appropriate”, having regard to the nature and extent of the conduct, the loss or damage caused, the circumstances and any previous contraventions (section 93(2)). The cap in section 93(3) applies to conduct constituting a single contravention and is 10% of the undertaking’s turnover for each year of the contravention or, if the contravention lasted more than three years, for the three years with the highest turnover; turnover under section 93(4) means the undertaking’s total gross revenues obtained in Hong Kong, and a year means its financial year. Proceedings must be brought within five years after the contravention ceased or the Commission became aware of it, whichever is later (section 92).

The four-step method was laid down by the Tribunal in Competition Commission v W. Hing Construction Co Ltd [2020] HKCT 1 of 29 April 2020 — the first penalty judgment — and adopted in the Commission’s Policy on Recommended Pecuniary Penalties (June 2020). Step 1: the base amount = the value of sales directly or indirectly related to the contravention in the last full financial year of participation (paragraph 2.3 of the policy) × a gravity percentage (15–30% for serious conduct, paragraph 2.8) × a duration multiplier in years (part years pro rata by month; less than a year counts as 1). Step 2: aggravating factors (a leading role, coercion, director involvement, continuation after the investigation began, obstruction, false non-collusion certificates) and mitigating factors (limited participation, a compliance programme, genuine uncertainty). Step 3: the statutory cap. Step 4: a cooperation discount and, on clear and compelling evidence, inability to pay. The Court of Appeal in [2022] HKCA 786 upheld the method but barred any reduction for a head contractor merely because it had “lent” its licence to a subcontractor.

Other Tribunal orders under section 94 and Schedule 3 include a declaration of contravention, an injunction, an order declaring an agreement void, damages, divestiture of assets, disgorgement of profit and an order to implement a compliance programme — in Prudential Hotel [2025] HKCT 4 such a programme, with annual certification by solicitors and reporting to the Commission, became part of the order. The Commission’s investigation costs under section 96 are recovered separately: HK$76,000 from InterContinental Grand Stanford, HK$95,000 from Prudential (against a total claim of HK$914,180 for 12 undertakings), HK$155,000 from each undertaking in Multisoft and HK$709,900 in the cleansing case; the Tribunal requires the Commission to disclose the make-up of those costs in advance (W. Hing (No 3) [2020] HKCT 1, paragraph 143). The losing party’s costs of the proceedings come on top: in Nutanix three respondents paid HK$2,887,680 each.

Individuals are exposed through two channels. The first is section 91: a person who attempted the contravention, aided, abetted, counselled or procured it, induced it, was knowingly concerned in it or conspired with others to effect it is “involved in a contravention” and may be fined alongside the undertaking — Lam Po Wong in Kam Kwong was fined HK$280,000 and Tang Wai Chun in Multisoft HK$32,000. The second is the disqualification order under sections 101–103: where a company has contravened a competition rule and the director’s conduct makes him or her unfit to be concerned in the management of a company, the Tribunal, on the Commission’s application, may prohibit that person for up to five years from being a director, liquidator, receiver or manager, or from being concerned in the management of any company. Unfitness under section 103(2) covers three situations: the director contributed to the contravention; did not contribute but had reasonable grounds to suspect it and took no steps; or did not know but ought to have known. In the first such case, [2020] HKCT 9, the Tribunal described the purpose of the order as protective rather than punitive, which lowers the standard of proof to the civil one; the directors’ duties under the Companies Ordinance on which this regime is superimposed are examined in Directors’ Duties and Liabilities under the Companies Ordinance (Cap. 622) in Hong Kong in 2026.

Author’s assessment: the penalty method makes the price of a cartel predictable, and that price is almost always higher than the gain. In Fungs the Tribunal observed that the penalties “greatly exceeded” the respondents’ gains from the works, and in Prudential that a penalty of HK$104,000 disgorged a substantial part of the HK$171,290 of counter rental income the hotel received over the period of the contravention. To gauge its own exposure a company needs three numbers: revenue from the affected contracts, duration and Hong Kong turnover; at a 20% gravity percentage and two years of participation, a cartel on contracts worth HK$50,000,000 yields a base amount of HK$20,000,000 before any uplift. Investigation costs, legal costs, director disqualification and loss of access to the customer’s tenders come on top.

Competition Tribunal Practice 2017–2026: All 17 Commission Cases, Their Outcome and the Penalties

Tribunal practice consists of the 17 originating notices filed by the Commission between 23 March 2017 and 25 June 2026; according to the Commission’s Annual Report for 2024/25, 15 cases involving 72 undertakings and individuals had been brought as at 31 March 2025, all eight fully concluded cases had been won by the Commission, a further four had completed trial and were awaiting judgment, and between December 2015 and 31 March 2025 the Commission had received 3,108 complaints and 4,236 enquiries. The table lists every case with its status as of September 2026; amounts are taken from the judgments of the Tribunal and the Court of Appeal.

In total, in the nine cases concluded with penalties the Tribunal has ordered about HK$55,400,000 (excluding ATAL’s HK$150,000,000, approval of which is deferred until trial): about 40% relates to the cleansing services case, the remainder to eight cases with amounts from HK$37,702 to HK$7,169,686. The time from originating notice to penalty in contested cases ran from two years and eight months to almost four years (W. Hing, Nutanix, Kam Kwong), in agreed cases one to two years.

Author’s assessment: the sectoral profile of the case law reflects the availability of evidence, not the structure of the economy. Thirteen of the seventeen cases involve tendering (bid-rigging and cover bidding), mostly with a public or quasi-public procurer: the Housing Authority, Ocean Park, the YWCA, schools, government subsidy schemes, owners’ corporations. There, bids are documented and non-collusion certificates add an aggravating factor. The conduct of digital platforms has so far been resolved by commitments rather than by litigation. A company taking part in Hong Kong’s public or quasi-public tenders should assume that its bids will be compared with those of its competitors — the price “homework” seized in Operation “Iron Pact” was detected in exactly that way.

The Gray Line Case [2026] HKCT 1 and Private Actions: Why an Intermediary Is Liable under Section 91, and Why a Victim Can Sue Only after a Tribunal Determination

Competition Commission v Gray Line Tours of Hong Kong Ltd & Ors [2026] HKCT 1 is Hong Kong’s first judgment on the liability of a cartel “facilitator”, delivered by the President of the Tribunal, Harris J, on 4 March 2026 after a hearing on 12–19 February 2025. The facts: from 2016 the tour operator Gray Line, which ran ticket counters in hotels, and Tink Labs, which placed in-room devices selling the same tickets to Disneyland, Ocean Park and the Peak Tram, aligned their prices; Tink Labs reported the cartel and obtained leniency; Gray Line, two hotels and Gray Line’s managing director admitted contraventions under the Kam Kwong procedure, and seven hotel groups received infringement notices. What remained in dispute was the liability of the owner and the manager of the Harbour Plaza 8 Degrees hotel, neither of which sold tickets itself but which, on the Commission’s case, “facilitated” the arrangement and thereby contravened section 6 directly.

The Tribunal’s position (paragraphs 52–75): in EU law an intermediary that is not active on the market is liable under Article 101 of the Treaty on the Functioning of the European Union under the AC-Treuhand line of authority, but Cap. 619 is built differently — it contains section 91, which specifically defines the liability of persons “involved in a contravention”: those who attempted it, aided, abetted, counselled or procured it, induced it, were knowingly concerned in it or conspired with others. Since the legislature created a separate head of liability with a requirement of intent, a claim against a facilitator must be brought under section 91 and not section 6. The Commission had pleaded no alternative case and accepted that on that reading its application must fail; the Tribunal dismissed it (paragraphs 75 and 142) with costs against the Commission. Obiter, the Tribunal noted that had section 6 applied the contravention would have run from 1 August 2016 to 7 March 2017, and confirmed the criminal standard of proof. As of September 2026 there is no public record of an appeal by the Commission; Slaughter and May (11 March 2026) and Deacons (20 March 2026) read the judgment as bringing clarity for intermediaries: liability requires awareness of the agreement, a meaningful contribution and an intention to further it.

Private actions are governed by Part 7 of Cap. 619, which is restrictive by design. Section 108 bars any proceedings alleging a contravention of the competition rules other than as provided by the Ordinance; section 110 gives a person who has suffered loss from a contravention of a conduct rule, or from involvement in one (the merger rule carries no follow-on right), a right of action for damages, but only after the contravention has been determined by the Tribunal, the Court of First Instance, the Court of Appeal or the Court of Final Appeal (a follow-on action), and only in the Tribunal; section 111 defers the claim until the appeal periods have run; section 113 provides for the transfer from the Court of First Instance to the Tribunal of cases in which a competition question arises. There is no standalone competition claim in Hong Kong — a victim of a cartel that the Commission has not taken to the Tribunal has no remedy under Cap. 619 and can only complain under section 37. Leniency does not shield against follow-on claims (paragraph 4.4 of the Commission’s policy restricts only the release of leniency materials to third parties). No Tribunal judgment in a follow-on claim had been published as at September 2026, although the declarations of contravention in the Housing Authority, Nutanix and cleansing cases formally open that route to the procurers.

Arbitration and contractual disputes remain available: a dispute about the validity of a contract containing a term contrary to the First Conduct Rule, or a contractual damages claim, may be arbitrated, and a Tribunal order declaring an agreement void or voidable (Schedule 3, paragraph 1(i)) may be relied on in such a dispute. Arbitral procedure in Hong Kong is described in Arbitration in Hong Kong in 2026: Cap. 609, the Arbitration Law Reform Programme and HKIAC Statistics.

Author’s assessment: Gray Line closed the Commission’s short cut, not the road. Section 91 requires proof of intent, which is harder than showing the “object” of an agreement under section 6, but the Commission has already used section 91 against individuals in Kam Kwong, Quantr and Multisoft and will have the chance to use it against corporate intermediaries in the next case — a tender consultant distributing price “homework” to contractors, for instance. For hotels, shopping centres, platforms and agents whose premises or services are used by competitors the practical lesson is that awareness of price alignment between tenants or partners, combined with passive assistance, is already a basis for a claim, and that an admission “as a facilitator”, as in Prudential, cost a penalty, investigation costs and a mandatory compliance programme.

Hong Kong Compared with the EU, Singapore and the UAE: The Judicial Model, Penalty Caps, Merger Control and Private Actions

A comparison of competition regimes matters to an international group operating through Hong Kong for three reasons: the Hong Kong company usually sits in a structure with a European, Singaporean or UAE affiliate; the group’s compliance policy has to be calibrated to the strictest of its jurisdictions; and the same conduct — an exchange of prices between regional distributors, say — is assessed differently in each. The table compares the four regimes on the parameters that most often determine the choice of structure and the scope of pre-deal checks.

Practical differences for a group with a Hong Kong entity. First: regional distribution agreements with exclusivity and pricing terms that pass a Hong Kong self-assessment against the Guidelines need checking under the Vertical Block Exemption Regulation in the EU and under the dominance rules, with their 40% presumption, in the UAE. Second: acquiring a Hong Kong company needs no competition clearance unless it is a carrier licensee, whereas a parallel acquisition of its UAE sister company may, since 31 March 2025, require notification to the Ministry of Economy and Tourism at least 90 days before closing, and since 30 July 2026 that procedure has been governed by a detailed executive regulation, Cabinet Resolution No. 59 of 2026. Third: a group compliance programme designed around the European administrative fine must, in Hong Kong, add the personal exposure of directors — disqualification and the criminal risk during a search — which EU-level law does not have.

Author’s assessment: Hong Kong is at once the most “judicial” of the four regimes and the narrowest on mergers, and those are two different conclusions. The judicial model makes proceedings long and costly for both sides and raises the value of pre-trial settlement; the absence of general merger control simplifies deals but shifts the analysis to sections 6 and 21 — the agreements around the deal and the conduct of the combined company. For entrepreneurs used to an administrative model with mandatory clearance of transactions, the Hong Kong regime calls for a reset of expectations: the regulator here does not clear or advise, it investigates and litigates.

A Cap. 619 Compliance Algorithm for a Hong Kong Company: Eight Steps from Risk Assessment to a Search Protocol

A competition compliance programme is a set of measures that the Commission recognises as a mitigating factor in its Policy on Recommended Pecuniary Penalties (paragraph 2.15), that the Tribunal has written into its orders in Quantr and Prudential, and that the Leniency Policy requires of an applicant as a condition of the agreement (paragraph 2.15(f)). What follows is a sequence of eight steps built on the logic of the statute: first establish which rules and thresholds apply, then remove the risks from documents and practice, then prepare people for contact with the Commission.

Step 1 — define the perimeter of the undertaking and its turnover. Establish which legal and natural persons form a single undertaking (the group, a contractor with its subcontractors, agents bearing no risk), calculate worldwide turnover under Cap. 619C for the financial year ending in the preceding calendar year, and compare it with the thresholds of HK$200,000,000 (for agreements) and HK$40,000,000 (for conduct), remembering that the first threshold gives no protection against liability for serious conduct. The calculation rests on the group’s accounting records, and keeping them so that each undertaking’s turnover can be evidenced is a job for the finance function: accounting support from UPPERSETUP.

Step 2 — map the points of contact with competitors. Trade associations, joint tenders, consortia, data exchanges through intermediaries, shared suppliers and customers, HR contacts: for each, identify what information passes and eliminate any exchange on future prices, discounts, volumes, customers and employee compensation; historical aggregated data may pass only through an independent intermediary in anonymised form.

Step 3 — review tendering practice. Adopt a rule that every bid is prepared independently, ban “cover” bids and any coordination of participation with other bidders; for joint bids, document why the participants could not bid alone; keep the pricing working files as evidence of independence. A false non-collusion certificate in a Housing Authority tender cost the cleansing companies a 25% uplift on their penalties. On 23 July 2026 the Commission published enhanced model Non-Collusion Clauses for tender documents: they require a bidder to give a statutory declaration that its bid was prepared independently and they spell out the criminal consequences — conspiracy to defraud carries up to 14 years’ imprisonment (section 159C(6) of the Crimes Ordinance, Cap. 200) and a false statutory declaration up to two years’ imprisonment and a fine (section 36 of the same Ordinance). Adopting the clauses is voluntary for the procurer, but a contractor should assume that large tenders will contain them.

Step 4 — review vertical contracts. Remove fixed and minimum resale prices, absolute bans on online sales and terms restricting a distributor’s sales outside its territory in response to unsolicited customer requests from distribution, franchise and licence agreements; recommended prices are permissible without pressure or sanctions. Determine whether the counterparty is a genuine agent (bearing no commercial risk) — in which case the restrictions fall outside section 6.

Step 5 — assess market power. For every narrow market in which the company’s share is large or its competitors few, describe barriers to entry, the evolution of shares and customer behaviour; review exclusive purchasing obligations, bundling, loyalty rebates and the terms on which competitors can access necessary inputs; where needed, prepare an efficiency justification showing the benefits passed on to consumers.

Step 6 — appoint an officer and train staff. Appoint a compliance officer at manager level or above, train the commercial team, tender and procurement staff and HR with attendance records, and build competition law into induction; the Tribunal approved that format — with annual certification by solicitors and reporting to the Commission — in Prudential in 2025. The annual reporting obligations into which such a cycle fits are described in Mandatory Annual Compliance for Hong Kong Companies 2026: Annual Return (NAR1), Audit, and Profits Tax Return (BIR51).

Step 7 — prepare a protocol for a search or a notice. Decide who receives the Commission’s officers, checks the warrant and calls the lawyer; prohibit deleting, moving or hiding documents and devices; explain that requirements under sections 41–43 and 50 are compulsory and that refusal, non-attendance and false explanations are criminal offences; store correspondence in a way that allows its integrity to be proved.

Step 8 — set the procedure for a suspected contravention. Record the facts with external counsel, assess whether the conduct was cartel conduct, and within days decide on a leniency application (a marker by telephone) or on cooperation under the Cooperation Policy; stop the conduct in parallel while preserving evidence; inform the board of the directors’ personal exposure under sections 91 and 101.

Author’s assessment: the eight steps are valuable not as a document but as evidence. A compliance programme in Hong Kong directly affects three outcomes: the size of the penalty (a mitigating factor under paragraph 2.15 of the policy), the decision on disqualifying a director (section 103(2) asks what the director knew and did) and the availability of leniency (a programme is a condition). A company that has a protocol, training records and tender working files on the day of the search is in a fundamentally different position from one that starts assembling those documents after the Commission’s letter arrives.

Typical Mistakes under the Competition Ordinance and What They Cost

The typical mistakes under Cap. 619 are seven recurring decisions, each of which has already ended in a penalty, a disqualification or a criminal case in the Tribunal’s practice of 2019–2026. Each is set out below with the provision it breaches and its cost, taken from the judgments.

Mistake 1 — assuming that a small turnover takes the company outside the law. The HK$200,000,000 threshold (Schedule 1, section 5) does not apply to price fixing, market sharing, output restriction or bid-rigging. Cost: Quantr, with sales below HK$150,000, was fined HK$37,702.26 and ordered to implement a compliance programme under the Tribunal’s supervision; subcontractors in the Housing Authority cases with turnover in the low millions received penalties from HK$132,000 to HK$600,000, payable by instalments over six months.

Mistake 2 — “lending” a licence or brand to a partner and assuming that the partner’s collusion is the partner’s problem alone. A head contractor and a subcontractor under common control are one undertaking. Cost: the Court of Appeal in [2022] HKCA 786 raised the penalties of W. Hing from HK$670,000 to HK$1,030,000, Wide Project from HK$740,000 to HK$1,135,000 and Fungs from HK$598,000 to HK$855,000 — plus the costs of the appeal.

Mistake 3 — signing a non-collusion certificate while knowing that bids have been coordinated. A Non-Collusion Certificate in a tender is an aggravating factor in its own right, and a false one is also a basis for a fraud prosecution; since 23 July 2026 the Commission’s enhanced model clauses add a statutory declaration to the certificate, and a false declaration is itself punishable by up to two years’ imprisonment (section 36 of the Crimes Ordinance, Cap. 200), while conspiracy to defraud carries up to 14 years (section 159C(6) of the same Ordinance). Cost: a 25% uplift on the base amount in the cleansing case (about HK$1,470,000 for HKC); in the 2026 building maintenance cartel case the Commission referred conspiracy-to-defraud matters for prosecution, and Operation “Iron Pact” ended with 50 arrests.

Mistake 4 — deleting correspondence or “losing” a device during a search. Destroying or concealing documents is an offence under section 53 carrying up to HK$1,000,000 and two years’ imprisonment, and an aggravating factor for the penalty as well. Cost: two months’ imprisonment for an employee of a cleansing company (conviction of 28 February 2025) and a 50% uplift on her employer’s penalty — about HK$2,940,000 on top of the base amount.

Mistake 5 — delaying the decision on leniency or cooperation. Full immunity goes only to the first applicant, and the cooperation discount falls from 50% to 20% and below as the case progresses. Cost: Hong Kong Commercial Cleaning Services, which admitted liability less than five months before trial, received a discount of only 9% — on a penalty of about HK$12,000,000 the gap to Band 1 (35–50%) is between HK$3,100,000 and HK$4,900,000; Nutanix, which contested the case to the end, paid HK$2,887,680 of the Commission’s costs on top of its penalty.

Mistake 6 — assuming a director is safe because he or she “was not personally involved”. Section 103(2)(b)–(c) covers a director who had reasonable grounds to suspect a contravention and did nothing, or who ought to have known of it. Cost: Cheung Yun Kam, the 74-year-old director of Luen Hop who took no part in the collusion himself but had grounds to suspect it and did nothing, was disqualified for one year and ten months; the directors of the cleansing companies for 24 months with personal penalties; the managing director of Gray Line for three years. For a foreign director, disqualification means being unable to hold office in any of the group’s Hong Kong companies.

Mistake 7 — passively “facilitating” an arrangement between partners on one’s own premises. A hotel, shopping centre, platform or consultant that knows of price alignment between tenants or contractors and helps to implement it risks a claim under section 91. Cost: Prudential Hotel, which admitted a facilitating role, paid a penalty of HK$104,000, investigation costs of HK$95,000 and part of the Commission’s costs, and must run a compliance programme with annual certification; the Commission, for its part, lost its claim against Harbour Plaza only because it chose the wrong legal basis — the next claim will be pleaded under section 91.

Author’s assessment: all seven mistakes share an underestimate of the personal dimension of liability. A corporate penalty in Hong Kong rarely exceeds a few million Hong Kong dollars and is not critical for a large group; what is critical is the disqualification of directors, criminal cases against employees, loss of access to tenders and the reputational cost of a published judgment naming names. That is why the right response to signs of a cartel is not “minimise the fine” but “protect the people”: secure the cooperation of employees under the Leniency Policy for Individuals and prevent any act during a search for which they would answer personally.

For Whom Cap. 619 Is a Real Risk and for Whom a Formality: Applicability by Type of Business

The applicability of the Competition Ordinance turns not on the size of a company but on its role in the market and on the structure of its contacts with competitors and counterparties. Below is a risk assessment for the types of business that foreign entrepreneurs most often register in Hong Kong; it is based on the priorities of the Commission’s Enforcement Policy (cartels, agreements causing significant harm, exclusionary abuses) and on the case law of 2017–2026.

For whom the regime creates no substantial obligations. A company whose Hong Kong activity is confined to holding assets, treasury operations or re-export without sales on the local market is caught by the conduct rules only where there is an effect on competition in Hong Kong; for it, a basic policy and director training suffice. Statutory bodies other than the six listed in Cap. 619A, and the seven exchange-group companies under Cap. 619B, are outside the rules. Mergers and acquisitions outside telecommunications need no clearance.

For whom the regime needs a budget of its own. A contractor bidding in Housing Authority and other public tenders, a distributor with a pricing policy for dealers, a platform with exclusive terms, and any business with a foreign director for whom disqualification in Hong Kong would mean losing his or her role across the whole group. For such companies a compliance programme is part of the cost of market entry, not an option. Particular situations — an upcoming tender with a joint bid, a transaction with a competitor, signs of price alignment at a partner — call for individual assessment; legal support on such questions is part of UPPERSETUP’s legal services.

Author’s assessment: for most foreign companies Cap. 619 is not the law that should put them off Hong Kong, but it is the law they forget when choosing a local partner. Practice shows that the risk sits not in the holding company but in the operating link: the local subcontractor, the distributor, the counter operator in a hotel, the member of the trade association. Checking such a partner for a history in the Commission’s cases (the registers and case pages are public) and writing competition terms into the contract with it is the cheapest of all the measures described in this article.

FAQ: Hong Kong’s Competition Ordinance Cap. 619

What is the Competition Ordinance Cap. 619 and when did it come into force?

The Competition Ordinance (Cap. 619) is Hong Kong’s competition statute, passed by the Legislative Council on 14 June 2012 as Ordinance No. 14 of 2012 and gazetted on 22 June 2012. It commenced in stages: the Competition Commission was established on 18 January 2013, the Tribunal on 1 August 2013, and the conduct rules and the merger rule have applied since 14 December 2015 (Competition Ordinance (Commencement) (No. 2) Notice 2015, L.N. 156 of 2015). The current e-Legislation version is dated 29 November 2020.

What are the three rules of Hong Kong’s Competition Ordinance?

The First Conduct Rule (section 6) prohibits agreements, concerted practices and decisions of associations with the object or effect of restricting competition in Hong Kong; the Second Conduct Rule (section 21) prohibits the abuse of a substantial degree of market power; and the merger rule (Schedule 7) prohibits mergers that substantially lessen competition, but applies only to holders of carrier licences under the Telecommunications Ordinance.

Who imposes fines for breaches of competition law in Hong Kong — the Commission or a court?

Only the Competition Tribunal, a court made up of judges of the Court of First Instance. The Commission investigates and brings proceedings but cannot fine; the contravention has to be proved to the criminal standard. The penalty is capped at 10% of the undertaking’s Hong Kong turnover for each year of the contravention, for a maximum of three years (section 93(3)).

Does the First Conduct Rule apply to a small business with turnover below HK$200,000,000?

Agreements between undertakings with combined turnover of not more than HK$200,000,000 are excluded (Schedule 1, section 5), but the exclusion does not cover serious anti-competitive conduct — price fixing, market sharing, output restriction and bid-rigging. Quantr, with sales below HK$150,000, was fined HK$37,702.26 for a cover bid in an Ocean Park tender.

Is there mandatory merger notification in Hong Kong?

No. The merger rule applies only to transactions involving a carrier licence holder, and even there notification is voluntary; the Commission may open a merger investigation within 30 days of becoming aware of the transaction and bring proceedings within six months. The CMHK — HKBN transaction in 2025 was cleared through commitments to the Communications Authority.

What does a director of a company that breaches the Competition Ordinance face?

On the Commission’s application the Tribunal may disqualify a director for up to five years (sections 101–103) where his or her conduct makes him or her unfit to manage a company — including where the director did not know of the contravention but ought to have known. By September 2026 seven directors had been disqualified for periods from one year and ten months to three years; a person involved in a contravention under section 91 may be fined personally.

Is participation in a cartel a criminal offence in Hong Kong?

No. Cap. 619 creates criminal offences only for failing to comply with the Commission’s requirements (section 52), destroying or concealing documents (section 53), obstructing a search (section 54), false information (section 55) and breaching a disqualification order (section 105) — up to a HK$1,000,000 fine and two years’ imprisonment. The first conviction — two months’ imprisonment for trying to delete documents during a search — came on 28 February 2025.

How do you obtain leniency from the Hong Kong Competition Commission?

Call the hotline +852 3996 8010 or write to Leniency@compcomm.hk to obtain a marker; at least 30 days are allowed to perfect it. Full immunity from penalty proceedings goes only to the first undertaking to report the cartel before an investigation begins (Type 1), on condition of full disclosure, ceasing participation, cooperation and not having coerced others; a separate policy of 8 September 2022 applies to individuals.

Can the amount of the penalty be negotiated with the Commission?

Yes, under the Cooperation and Settlement Policy: a discount of 35–50% for the first cooperating undertaking, 20–40% for the second, up to 25% for later ones and up to 20% after proceedings are commenced. The parties sign a statement of agreed facts and apply jointly to the Tribunal under the Kam Kwong procedure, but the final penalty is set by the Tribunal.

What did the Tribunal decide in Gray Line [2026] HKCT 1?

That a company that is not active on the market but “facilitates” a cartel is liable not directly under section 6 but under section 91 as a person involved in the contravention — which requires proof of intent. The Commission had pleaded its case against the Harbour Plaza hotel companies under section 6 alone, and on 4 March 2026 the claim was dismissed with costs against the Commission.

Can a victim of a cartel sue for damages in Hong Kong?

Only after the contravention has been determined by the Tribunal or a court, and only in the Tribunal (a follow-on action under section 110). Part 7 of Cap. 619 provides no standalone action, and a cartel participant’s leniency gives no protection against such claims.

Are employers’ agreements on wages and on not hiring competitors’ staff caught?

Yes. In its bulletin of 9 April 2018 the Commission equated fixing compensation with price fixing and no-poaching agreements with market sharing; the exchange of information on future salaries between competitors is prohibited, and historical data may be shared only through an independent intermediary in aggregated form.

Does the Competition Ordinance apply to foreign companies without an office in Hong Kong?

Yes, if the agreement or conduct has the object or effect of restricting competition in Hong Kong (sections 8 and 23), regardless of where the agreement was made or the party is located. In Linde the German company Linde GmbH is a respondent.

Key Takeaways

The Competition Ordinance Cap. 619 is a judicial regime with narrow merger control and broad personal liability.First: the Ordinance was passed on 14 June 2012 (Ordinance No. 14 of 2012) and has applied in full since 14 December 2015; its three rules — the First Conduct Rule, the Second Conduct Rule and the merger rule — apply to any undertaking, natural persons included, while the merger rule reaches only carrier licence holders. Second: a contravention is established by the Competition Tribunal to the criminal standard, not by the Commission; the penalty is capped at 10% of Hong Kong turnover for each year of the contravention (three years at most) and is calculated by the four-step method of W. Hing, which in the cleansing services case produced HK$10,960,000 and HK$11,300,000. Third: the HK$200,000,000 and HK$40,000,000 thresholds protect only against “soft” infringements; cartel conduct — price fixing, market sharing, output restriction, bid-rigging, and wage-fixing and no-poaching agreements too — is punishable at any turnover. Fourth: personal liability is real — seven directors have been disqualified for up to three years, individuals have been fined under section 91, the first criminal sentence has been passed for deleting documents during a search, and joint operations with the ICAC and the Police in 2024–2026 have ended in dozens of arrests. Fifth: pre-trial resolution — leniency, cooperation, commitments, infringement notices — decides most cases, and its economics depend on the order of arrival. Sixth: Gray Line [2026] HKCT 1 moved intermediary liability to section 91 with its requirement of intent, and private claims remain follow-on only, in the Tribunal.

For a group with a Hong Kong entity the practical minimum is a compliance programme with a search protocol, a review of tendering and distribution practice, an assessment of market power in narrow markets, and a decision taken in advance on what to do when signs of a cartel appear.

Summary. The Competition Ordinance (Cap. 619) is Hong Kong’s competition statute (Ordinance No. 14 of 2012), passed on 14 June 2012 and fully in force since 14 December 2015; it establishes the First Conduct Rule (section 6, a prohibition of anti-competitive agreements), the Second Conduct Rule (section 21, a prohibition of the abuse of a substantial degree of market power) and the merger rule (Schedule 7, telecommunications carrier licences only). Contraventions are investigated by the Competition Commission and determined and sanctioned by the Competition Tribunal: a penalty of up to 10% of Hong Kong turnover for each year of the contravention (no more than three years), director disqualification of up to five years and recovery of investigation costs; obstructing an investigation is a criminal offence (up to HK$1,000,000 and two years’ imprisonment). Exclusions cover agreements between undertakings with combined turnover of up to HK$200,000,000 (except cartels) and conduct of undertakings with turnover of up to HK$40,000,000. Leniency goes to the first applicant; the Cooperation Policy gives discounts of 35–50%, 20–40% and up to 25%. By September 2026 the Commission had filed 17 cases; the largest penalties are HK$22,290,000 in the cleansing services case and the agreed HK$150,000,000 of ATAL; Gray Line [2026] HKCT 1 held that a cartel facilitator is liable under section 91, not section 6.

Sources

Primary sources — Hong Kong legislation (Hong Kong e-Legislation, Legislative Council, HKSAR Government)

1.        Competition Ordinance (Cap. 619) — current version on Hong Kong e-Legislation

2.        Cap. 619, section 9 — application for a Commission decision

3.        Cap. 619, section 50 — powers conferred by a search warrant

4.        Cap. 619, section 159 — concurrent jurisdiction with the Communications Authority

5.        Cap. 619, Schedule 3 — orders the Tribunal may make in relation to contraventions of the competition rules

6.        Cap. 619, Schedule 7 — mergers

7.        Competition (Application of Provisions) Regulation (Cap. 619A)

8.        Competition (Disapplication of Provisions) Regulation (Cap. 619B)

9.        Competition (Turnover) Regulation (Cap. 619C)

10.    Competition Tribunal Rules (Cap. 619D) — Rule 39 (orders by consent) and Rule 76 (failure to file a response)

11.    Competition (Fees) Regulation (Cap. 619G)

12.    Crimes Ordinance (Cap. 200), section 159C(6) — 14 years’ imprisonment for conspiracy to defraud

13.    Crimes Ordinance (Cap. 200), section 36 — false statutory declarations

14.    Competition Ordinance (Ord. No. 14 of 2012) — text as gazetted, Legislative Council

15.    Legislative Council agenda of 19 December 2012 — extension of the amendment period for the Competition Ordinance (Commencement) Notice 2012 (L.N. 177 of 2012), tabled on 28 November 2012

16.    Legislative Council agenda of 25 March 2015 — regulations L.N. 36–38 of 2015 and the Competition Ordinance (Commencement) Notice 2015, L.N. 39 of 2015

17.    Legislative Council agenda of 14 October 2015 — Competition (Fees) Regulation (L.N. 155 of 2015) and Competition Ordinance (Commencement) (No. 2) Notice 2015 (L.N. 156 of 2015)

18.    HKSAR Government press release of 16 July 2015 on the full commencement of the Competition Ordinance on 14 December 2015

19.    Cap. 619 in Bilingual Laws Information System format with commencement notes (the Commission’s copy)

Primary sources — Competition Commission and Communications Authority

20.    Guideline on the First Conduct Rule (27 July 2015)

21.    Guideline on the Second Conduct Rule (27 July 2015)

22.    Enforcement Policy (November 2015)

23.    Leniency Policy for Undertakings Engaged in Cartel Conduct (April 2020)

24.    Leniency Policy for Individuals Involved in Cartel Conduct (8 September 2022)

25.    Cooperation and Settlement Policy for Undertakings Engaged in Cartel Conduct (April 2019)

26.    Policy on Recommended Pecuniary Penalties (June 2020)

27.    Policy on Section 60 Commitments (November 2021)

28.    Advisory Bulletin: Competition concerns regarding certain practices in the employment marketplace (9 April 2018)

29.    Commission cases in the Competition Tribunal — list with filing dates

30.    Register of Commission decisions under sections 11 and 26

31.    Register of infringement notices

32.    Register of section 60 commitments

33.    The Commission’s notice of acceptance of the online food delivery platforms’ commitments (First Conduct Rule concerns; the Commission reached no conclusion on market power)

34.    Register of block exemption orders (orders under sections 15 and 20)

35.    Competition (Block Exemption for Vessel Sharing Agreements) Order 2017 as varied in 2026 — conditions and exclusions

36.    Commission press release of 21 December 2020 on the first Second Conduct Rule case (Linde)

37.    Commission press release of 4 November 2022 on ATAL’s admission of liability and the agreed HK$150,000,000 penalty

38.    Commission press release of 7 June 2024 on the Tribunal’s orders in the first government subsidy scheme cartel case

39.    Commission press release of 31 July 2024 on the first order under Rule 76 against respondents who filed no response

40.    Commission press release of 20 January 2025 on the Tribunal’s orders in the cleansing services cartel case

41.    Commission press release of 28 February 2025 on the first criminal conviction for non-compliance with its investigation powers

42.    Commission statement of 27 May 2025 on the first criminal case for failure to attend

43.    Commission press release of 25 March 2026 on the building maintenance cartel case involving 11 housing estates

44.    Commission press release of 17 June 2026 on the acceptance of Keeta’s commitment

45.    Commission press release of 25 June 2026 on the Technology Voucher Programme cartel case

46.    Commission press release of 23 July 2026 on the enhanced model Non-Collusion Clauses

47.    Commission press release of 31 July 2026 on the renewal of the block exemption order for vessel sharing agreements

48.    Commission press release of 13 August 2026 on the new round of searches in the building maintenance cartel case (28 projects)

49.    Joint press release of the Commission, the ICAC and the Police of 31 August 2026 on Operation “Iron Pact”

50.    Competition Commission Annual Report 2024/25

51.    Commission newsletter Competition Matters, September 2026

52.    Communications Authority statement of 1 August 2025 on the acceptance of CMHK’s commitments in relation to the acquisition of HKBN

Primary sources — judgments (Judiciary of Hong Kong; Hong Kong Legal Information Institute)

53.    Competition Commission v Nutanix Hong Kong Ltd & Ors [2019] HKCT 2 — first liability judgment, criminal standard of proof

54.    Competition Commission v W. Hing Construction Co Ltd & Ors [2020] HKCT 1 — first penalty judgment, four-step method

55.    Competition Commission v Kam Kwong Engineering Co Ltd & Ors [2020] HKCT 3 — consent-order procedure

56.    Competition Commission v Fungs E&M Engineering Co Ltd & Ors [2020] HKCT 9 — first director disqualification order

57.    Competition Commission v Quantr Ltd & Anor [2020] HKCT 10

58.    Competition Commission v Nutanix Hong Kong Ltd & Ors [2020] HKCT 11 — penalties

59.    Competition Commission v Fungs E&M Engineering Co Ltd & Ors [2021] HKCT 1 — penalties

60.    Competition Commission v W. Hing Construction Co Ltd & Ors [2021] HKCA 877 — the first appeal from the Tribunal: partners’ liability and the Court of Appeal’s refusal to decide the standard of proof

61.    Competition Commission v W. Hing Construction Co Ltd & Ors [2022] HKCA 786 — Court of Appeal on the single economic unit and the level of penalties

62.    Competition Commission v Kam Kwong Engineering Co Ltd & Ors [2022] HKCT 1 — penalties and disqualification

63.    Competition Commission v Kam Kwong Engineering Co Ltd & Ors [2022] HKCT 2 — penalties on Pacific View and Lam Po Wong

64.    Competition Commission v Quadient Technologies Hong Kong Ltd & Ors [2023] HKCT 1

65.    Competition Commission v Gray Line Tours of Hong Kong Ltd & Ors [2023] HKCT 2 — consent orders, disqualification of Wu Siu Ieng Michael

66.    Competition Commission v ATAL Building Services Engineering Ltd & Ors [2024] HKCT 1

67.    Competition Commission v Hong Kong Commercial Cleaning Services Ltd & Ors [2025] HKCT 1 — penalty calculation, obstruction as an aggravating factor

68.    Competition Commission v Gray Line Tours of Hong Kong Ltd & Ors [2025] HKCT 2 — penalty on Prudential Hotel

69.    Competition Commission v ATAL Building Services Engineering Ltd & Ors [2025] HKCT 3 — 2026 trial dates

70.    Competition Commission v Gray Line Tours of Hong Kong Ltd & Ors [2025] HKCT 4 — costs, sanctioned payments, compliance programme

71.    Competition Commission v Gray Line Tours of Hong Kong Ltd & Ors [2026] HKCT 1 — facilitator liability under section 91

Comparative law (primary instruments)

72.    Council Regulation (EC) No 1/2003 — Article 23(2) on the cap on fines

73.    Singapore Competition Act 2004 — sections 54, 69 and 86 (Singapore Statutes Online)

Professional commentary (Level 2)

74.    Slaughter and May — Priorities in focus: 10 years of competition law in Hong Kong (30 December 2025)

75.    Slaughter and May — Tourist attraction tickets cartel case: clarifying the basis for facilitator liability in Hong Kong (11 March 2026)

76.    Deacons — Dual lessons from the Competition Tribunal’s dismissal of the first facilitation claim on technical grounds (20 March 2026)

77.    O’Melveny — Hong Kong Warns Employers Against Wage-Fixing and No Poach Agreements

78.    Gibson Dunn — UAE Competition Law: Executive Regulations Now in Force (2026)

79.    White & Case — UAE issues long-anticipated executive regulations for its Competition Law (2026)

UPPERSETUP materials

80.    Hong Kong Company Registration 2026: Requirements, Procedure, Taxes, and Annual Compliance

81.    Directors’ Duties and Liabilities under the Companies Ordinance (Cap. 622) in Hong Kong in 2026

82.    The Employment Ordinance (Cap. 57) in 2026: the 417/468 Rule, the End of MPF Offsetting, and a HKD 43.1 Minimum Wage

83.    Importing and exporting in Hong Kong in 2026: declarations, the free port regime and licensed goods

84.    Hong Kong + UAE: Dual Structure for International Business 2026 — The Complete Guide

85.    Arbitration in Hong Kong in 2026: Cap. 609, the Arbitration Law Reform Programme and HKIAC Statistics

86.    Mandatory Annual Compliance for Hong Kong Companies 2026: Annual Return (NAR1), Audit, and Profits Tax Return (BIR51)

A note on sources. The text of the Competition Ordinance and of the subsidiary legislation Cap. 619A–619G was read in its current version on Hong Kong e-Legislation on 11 September 2026; the numbers of the Ordinances and of the commencement notices were confirmed from the Legislative Council’s Bills Database and Council agendas. Penalty amounts, disqualification periods and procedural holdings are taken from the judgments of the Tribunal and the Court of Appeal rather than from summaries: the Tribunal judgments from the Judiciary’s Legal Reference System, and [2021] HKCA 877, which could not be located in that system, from the database of the Hong Kong Legal Information Institute at the Faculty of Law of the University of Hong Kong. The dates of the Commission’s policies are those on the documents themselves (the Cooperation Policy is dated April 2019 and was published on 29 April 2019; the Leniency Policy for Individuals superseded the April 2020 version on 8 September 2022). The Commission’s own sources differ on the commencement date of CTEA 1/2026: the press release of 25 March 2026 says proceedings were commenced “today”, while the Commission’s case list gives 31 March 2026; the article gives both. Information on cases without a published judgment (T.H. Lee, Linde, Tien Chu, Midland and both 2026 cases) is confined to filing dates and press releases; as at 11 September 2026 the Commission’s pages for those cases carry no substantive judgment, and neither the Commission nor the public court sources record an appeal against [2026] HKCT 1 — the article says so expressly. The parameters of the EU and Singapore regimes are taken from the primary instruments; those of the UAE regime (notification thresholds, timing, the range of fines and the executive regulation, Cabinet Resolution No. 59 of 2026) were checked against 2026 alerts by international law firms rather than against the primary Arabic text. The number of statutory bodies outside the Ordinance is not confirmed by an official source and is not given. Local boutique consulting and company-formation firms and aggregators were not used as sources. All links were checked on 11 September 2026.

Disclaimer

This material is for information purposes only and does not constitute legal, tax, financial, investment or consulting advice. Before taking any decision, individual professional advice should be obtained that takes into account the specific situation, the jurisdiction, the status of the company and the current requirements of the regulators.

Current as of September 2026.