Hong Kong: Competition issues for distribution and supply agreements

This piece was originally published on Practical Law and is republished with the permission of the publishers.

In brief

A Practice Note outlining the key antitrust and competition issues that can arise in relation to distribution and supply agreements in Hong Kong. This includes a discussion of the antitrust and competition risks associated with common price-related terms, geographic and territorial restrictions, customer restrictions, sales channel restrictions, exclusivity, tying and bundling, and other considerations for dealing with competitors in a distribution context.


Contents

The principal competition legislation in Hong Kong is the Competition Ordinance (Cap 619) which came into full effect on 14 December 2015. The Competition Ordinance prohibits businesses (undertakings) from entering into agreements with other undertakings that prevent, restrict or distort competition in Hong Kong. It also prohibits businesses with a significant degree of market power from abusing their market power in a way which prevents, restricts or distorts competition in Hong Kong.

The Hong Kong Competition Commission ("Commission") and the Competition Tribunal ("Tribunal") are primarily responsible for competition law enforcement in Hong Kong. The Commission has broad powers to investigate and bring proceedings relating to alleged breaches of the Competition Ordinance. The Tribunal is a specialist division within the Hong Kong High Court. It has primary responsibility to hear competition cases and issue decisions on breaches, penalties and other relief. Tribunal decisions can be appealed to the Court of Appeal and Court of Final Appeal.

This Note includes:

  • A description of the regulatory framework for challenging vertical distribution agreements in Hong Kong
  • A discussion of the antitrust and competition risks in distribution agreements

While contested vertical-agreement-related cases have been relatively uncommon in Hong Kong, parties should still carefully consider competition law risks when concluding these agreements.

Click here to access full alert.

 


Copyright © 2022 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.