Competition Ordinance/Part 6

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PART 6
Enforcement before Tribunal

Division 1—Introductory

90. Interpretation

In this Part—

“disqualification order” (取消資格令) means an order made by the Tribunal under section 101 disqualifying a person from being a director of a company or from otherwise being concerned in the affairs of a company;

“pecuniary penalty” (罰款) means a pecuniary penalty ordered to be paid, under section 93.

91. Persons involved in contravention of competition rule

A reference in this Part to a person being involved in a contravention of a competition rule means a person who—

(a) attempts to contravene the rule;

(b) aids, abets, counsels or procures any other person to contravene the rule;

(c) induces or attempts to induce any other person, whether by threats or promises or otherwise, to contravene the rule;

(d) is in any way, directly or indirectly, knowingly concerned in or a party to the contravention of the rule; or

(e) conspires with any other person to contravene the rule.

Division 2—Pecuniary Penalty

92. Commission may apply for pecuniary penalty

(1) If, after carrying out such investigation as it considers appropriate, the Commission considers it appropriate to do so, it may apply to the Tribunal for a pecuniary penalty to be imposed on any person it has reasonable cause to believe—

(a) has contravened a competition rule; or

(b) has been involved in a contravention of a competition rule.

(2) An application under subsection (1) may not be made—

(a) in the case of an application with respect to a contravention of the merger rule, more than 6 months after the day on which the merger was completed or the Commission became aware of the merger, whichever is the later; or

(b) in the case of an application with respect to a contravention of a conduct rule, more than 5 years after the day on which the contravention ceased or the Commission became aware of the contravention, whichever is the later.

93. Tribunal may impose pecuniary penalty

(1) If the Tribunal is satisfied, on application by the Commission under section 92, that a person has contravened or been involved in a contravention of a competition rule, it may order that person to pay to the Government a pecuniary penalty of any amount it considers appropriate.

(2) Without limiting the matters that the Tribunal may have regard to, in determining the amount of the pecuniary penalty, the Tribunal must have regard to the following matters—

(a) the nature and extent of the conduct that constitutes the contravention;

(b) the loss or damage, if any, caused by the conduct;

(c) the circumstance in which the conduct took place; and

(d) whether the person has previously been found by the Tribunal to have contravened this Ordinance.

(3) The amount of a pecuniary penalty imposed under subsection (1) in relation to conduct that constitutes a single contravention may not exceed in total—

(a) subject to paragraph (b), 10% of the turnover of the undertaking concerned for each year in which the contravention occurred; or

(b) if the contravention occurred in more than 3 years, 10% of the turnover of the undertaking concerned for the 3 years in which the contravention occurred that saw the highest, second highest and third highest turnover.

(4) In this section—

“turnover” (營業額) means the total gross revenues of an undertaking obtained in Hong Kong;

“year” (年度) means the financial year of an undertaking or, if the undertaking does not have a financial year, a calendar year.

Division 3—Other Orders

94. Other orders of Tribunal

(1) If the Tribunal is satisfied that a person has contravened, or been involved in a contravention of a competition rule, it may (whether or not it makes an order under section 93 imposing a pecuniary penalty), either of its own motion or on application made for this purpose, make any order it considers appropriate against that person, including all or any of the orders specified in Schedule 3.

(2) An application for an order under subsection (1) may not be made—

(a) in the case of an application with respect to a contravention of the merger rule, more than 6 months after the day on which the merger was completed or the Commission became aware of the merger, whichever is the later; or

(b) in the case of an application with respect to a contravention of a conduct rule, more than 5 years after the day on which the contravention ceased or the Commission became aware of the contravention, whichever is the later.

(3) Despite subsection (2)(a), the Tribunal may, on application made before the expiry of the period referred to in that subsection, extend the period within which an application under subsection (1) may be made with respect to a contravention of the merger rule if the Tribunal considers it reasonable to do so.

95. Interim orders

(1) Subject to subsection (2), if the Tribunal is satisfied that a person is engaged in or is proposing to engage in conduct that constitutes or would constitute a contravention of the competition rules, it may, either of its own motion or on application made for this purpose, make an interim order pending its determination of an application for an order under section 94.

(2) A person other than the Commission is not entitled to make an application under subsection (1) by reason that any other person is engaged in or is proposing to engage in conduct that contravenes or would contravene the merger rule.

(3) An interim order remains in force for the period, being a period of not more than 180 days, specified in the order, but this period may be extended by the Tribunal for a further period of not more than 180 days on any one occasion.

(4) An interim order may be made whether or not an application for a pecuniary penalty under section 92 or an order under section 94 has been made.

(5) The Tribunal may make an order under this section whether or not—

(a) the person against whom the order is to be made intends to engage again in or intends to continue to engage in the conduct that is to be the subject of the order;

(b) the person against whom the order is to be made has previously engaged in the conduct that is to be the subject of the order; or

(c) there is an imminent danger of damage or loss being incurred by any person if the order is not made.

96. Order to pay costs of Commission investigation

(1) The Tribunal may order any person who has contravened a competition rule to pay to the Government an amount equal to the amount of the costs of and incidental to any investigation into the conduct or affairs of that person, reasonably incurred by the Commission in connection with proceedings for the contravention.

(2) In this section—

“costs” (開支) include fees, charges, disbursements, expenses and remuneration.

Division 4—Contraventions of Merger Rule

Subdivision 1—Anticipated Mergers

97. Proceedings in relation to anticipated mergers

(1) If the Commission, after conducting an investigation, has reasonable cause to believe that arrangements are in progress or in contemplation which, if carried into effect, will result in a merger that is likely to contravene the merger rule, it may apply to the Tribunal for an order under this section.

(2) If the Tribunal is satisfied, on application made under this section, that arrangements are in progress or in contemplation which, if carried into effect, will result in a merger that is likely to contravene the merger rule, it may make an order directed against a party to the arrangements or any other person—

(a) ordering the person against whom the order is directed not to proceed with the merger;

(b) ordering the person against whom the order is directed not to proceed with a part of the merger;

(c) in addition to or instead of an order referred to in paragraph (b), prohibiting the person against whom the order is directed from doing anything that will result in a merger.

(3) If the Tribunal is not satisfied that an arrangement, if carried into effect, will result in a merger that is likely to contravene the merger rule, it may make a declaration to that effect.

(4) An order under this section may contain anything permitted by Schedule 4.

98. Interim orders

(1) If an application has been made to the Tribunal under section 97 but has not yet been finally determined, the Tribunal may, either of its own motion or on application by the Commission, make interim orders for the purpose of preventing pre-emptive action, including orders—

(a) prohibiting or restricting the doing of things that the Tribunal considers would constitute pre-emptive action;

(b) imposing on any person concerned obligations as to the carrying on of any activities or the safeguarding of any assets;

(c) providing for the carrying on of any activities or the safeguarding of any assets either by the appointment of a person to conduct or supervise the conduct of any activities (on any terms and with any powers that may be specified or described in the order) or in any other manner.

(2) In this section—

“pre-emptive action” (先發制人行動) means any action that might prejudice the hearing of the application under section 97 or any final order that the Tribunal might make on the hearing of the application.

Subdivision 2—Mergers

99. Application to Tribunal for order

(1) If the Commission, after carrying out such investigation as it considers appropriate, has reasonable cause to believe that a merger contravenes the merger rule, it may apply to the Tribunal for an order under section 100.

(2) An application for an order under subsection (1) must be made within the period of 6 months after the day on which the merger was completed or the Commission became aware of the merger, whichever is the later.

(3) Despite subsection (2), the Tribunal may, on application by the Commission made before the expiry of the period referred to in that subsection, extend the period within which an application under subsection (1) may be made if the Tribunal considers it reasonable to do so.

100. Proceedings in relation to mergers

(1) If the Tribunal is satisfied, on application by the Commission under section 99, that a merger contravenes the merger rule, it may make any order it considers appropriate for the purpose of bringing the contravention to an end.

(2) An order made under subsection (1) may contain anything permitted by Schedule 4.

Division 5—Disqualification Orders

101. Disqualification order

(1) In the circumstances specified in section 102, the Tribunal may, on application by the Commission, make a disqualification order against a person.

(2) A disqualification order is an order that a person may not, without the leave of the Tribunal—

(a) be, or continue to be, a director of a company;

(b) be a liquidator or provisional liquidator of a company;

(c) be a receiver or manager of a company’s property; or

(d) in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company, for a specified period, not exceeding 5 years, beginning with the date of the order.

(3) In this section—

“specified” (指明) means specified in the disqualification order.

102. Circumstances in which disqualification order may be made

The Tribunal may only make a disqualification order against a person if both of the following conditions are satisfied in relation to that person—

(a) it has determined that a company of which the person is a director has contravened a competition rule; and

(b) it considers that the person’s conduct as a director makes the person unfit to be concerned in the management of a company.

103. Unfitness to be concerned in management of company

(1) For the purpose of deciding under section 102(b) whether a person is unfit to be concerned in the management of a company, the Tribunal—

(a) must have regard to whether subsection (2) applies to the person; and

(b) may have regard to the conduct of the person as the director of a company, in connection with any other contravention of a competition rule.

(2) This subsection applies to a person if as a director of the company—

(a) the person’s conduct contributed to the contravention of the competition rule;

(b) the conduct of the person did not contribute to the contravention, but the person had reasonable grounds to suspect that the conduct of the company constituted the contravention and took no steps to prevent it; or

(c) the person did not know but ought to have known that the conduct of the company constituted the contravention.

104. Applications for disqualification order and for leave under an order

(1) An application for a disqualification order may be made only by the Commission.

(2) An application for leave of the Tribunal to participate in the affairs of a company in one of the ways prohibited under section 101(2) (Disqualification order) may be made only by or on behalf of the person against whom the order was made.

105. Contravention of disqualification order

A person who contravenes a disqualification order commits an offence and is liable—

(a) on conviction on indictment, to a fine of $1,000,000 and to imprisonment for 2 years; or

(b) on summary conviction, to a fine at level 6 and to imprisonment for 6 months.