OECD kpcdb

1. Scope

Section 21 sets forth that 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.

The Guideline on the Second Conduct Rule provides an illustrative list of conduct that may constitute an abuse of a substantial degree of market power: predatory pricing; tying and bundling; margin squeeze; refusing to deal and exclusive dealing.

Schedule 1 of the Ordinance sets out a number of general exclusions from the Second Conduct Rule: compliance with legal requirements, services of general economic interest, mergers, and conduct of lesser significance. Under the conduct of lesser significance exclusion (Section 6 of Schedule 1), the Second Conduct Rule does not apply to conduct engaged in by an undertaking the turnover of which does not exceed HK$40 million.

2. Assessment

Section 21(3) sets out the following list of factors that may be taken into account to establish whether an undertaking has a substantial degree of market power: the market share of the undertaking; the undertaking’s power to make pricing and other decisions; any barriers to entry to competitors into the relevant market; and any other relevant matters.

3. Remedies and sanctions

See Section I.4 above.

There have not yet been any decisions sanctioning abuses of substantial degree of market power.

 

* This information is based on Competition Law in Asia-Pacific: A Guide to Selected Jurisdictions (2018).