Sanctions – “Walk Tall”

Headlines in some of the local press towards the end of last year to the effect that the new head of the Competition Commission (the Chief Executive Officer, not to be confused with a “Sheriff”) allegedly wished to “jail those who flout laws” may have raised a few eyebrows in some quarters.

These observations were followed by comment in the market that (in fact) it could take years to build-up enough support for such measures in Hong Kong. The head of the Competition Commission appears to have cut his teeth as a prosecutor in the United States; a jurisdiction with one of the highest adult incarceration rates in the world and the attendant problems that come with it.

Since the Chief Executive Officer’s appointment some six months ago rarely does a moment go by without some warnings in the market concerning sanctions for infringement of the city’s competition laws. Notwithstanding this, the Competition Commission is yet to take its first case to trial (thought to commence in June 2018).

The principal sanction under the Competition Ordinance (Cap. 619) is a pecuniary penalty (sought by the Commission and ordered by the Competition Tribunal). There is also provision for (among other things) disqualification orders against individuals. Criminal offences (punishable by fines and imprisonment) do exist for things like providing false or misleading information, destroying documents, or obstructing a search warrant.

As yet, no one is likely to do “hard time” for contravening one of the Ordinance’s two main conduct rules.

It is interesting to watch any regulator (particularly, a nascent one) balance talk of tougher sanctions with a need to educate the market.

Time will tell how talk of tougher sanctions sits with some of the more progressive members of the Commission. Local circumstances count and the line from the song of the same name comes to mind – “You walked tall each time you walked the line”.