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Enhanced leniency programme for cartel conduct

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Based on its accumulated experience since the Competition Ordinance came into full effect in late 2015, the Hong Kong Competition Commission enhanced its leniency framework for cartel conduct in April 2020. The primary change is to create a distinction between: “Type 1 leniency”, granted to companies that report cartel conduct before any form of investigation; and “Type 2 leniency”, where the cartel conduct is already being assessed or investigated. While the Commission will agree not to commence proceedings before the Tribunal against a successful leniency applicant under both Type 1 and 2, it may, when necessary, issue an infringement notice to Type 2 applicants requiring a commitment to admit a contravention, in order to permit the initiation of follow-on proceedings against them. Other innovative features of the enhanced leniency framework include a requirement to implement an effective compliance programme as a condition of being granted leniency. The revised framework also introduces a leniency policy for individuals. This creates a race between companies and their employees in seeking leniency, thereby incentivizing early reporting. With all the enhancements, the revised framework makes it easier and more attractive for both companies and individuals to come forward and cooperate with the Commission.