Punishing Cartel Behaviour : Means to Encourage Compliance with the Hong Kong Competition Ordinance

This paper examines the way that cartel behaviour may be sanctioned under the new Hong Kong Competition Ordinance, and assesses whether such punishment is suitable to efficiently deter this kind of anti-competitive activity. The legislation, adopted in 2012, has introduced an array of sanctions which are traditionally used in competition regimes around the world to fight practices considered to be particularly pernicious. When a company is found to have breached the CO, remedies and pecuniary penalties may be imposed on the corporation. In addition, individual sanctions are also contemplated, and directors may be disqualified in certain cases. Interestingly, harsher sanctions may be imposed on individuals who breach the procedural rules, including fines and even imprisonment. The paper consists of three main parts. It begins with an analysis of the goals that penalties in competition law ought to pursue by drawing on the traditional justifications of punishment, and focusing expressly on reparation, retribution and deterrence. Subsequently, an overview of the most important forms of punishing cartels is provided, with an assessment of their pros and cons. This is followed by a study of the specific penalties that are imposed in Hong Kong (both in the former sector-specific competition rules and in the new cross-sector CO), and their suitability to achieve the goals described in the first section. Finally, conclusions are drawn