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Antitrust Enforcement and State Restraints at the Mainland China-Hong Kong Interface: The Importance of Bilateral Antitrust Co-operation

  • Kelvin Hiu Fai KWOK (a1)
Abstract

This article argues that effective co-operation between the antitrust authorities of Mainland China and Hong Kong in antitrust enforcement and the removal of anti-competitive state restraints is essential to the promotion of market competition in, as well as free trade and economic integration between, the two regions. This entails the careful design and conclusion of a bilateral co-operation agreement embracing not only comity co-peration in antitrust enforcement, but also the adoption of a diplomatic solution of mutual self-restraint for the removal of anti-competitive state restraints at the Mainland China-Hong Kong interface. This would also require the co-operation of Mainland Chinese and Hong Kong government authorities. Only with such bilateral cooperation can anti-competitive business practices and state restraints obstructing free trade and economic integration between the two regions be eliminated.

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Assistant Professor, Faculty of Law, University of Hong Kong; Barrister-at-Law, Des Voeux Chambers, Hong Kong. The author wishes to thank his research assistants for their excellent research assistance, and the University of Hong Kong for its generous funding support under the Small Project Funding scheme (Project Code: 201309176238). This article does not represent the views of the organizations with which the author is affiliated.

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1. Basic Law, Preamble, Chapter II; Lau Kong Yung & Others v Director of Immigration (1999) 2 HKCFAR 300, 344 (‘The Basic Law is the constitution of the Hong Kong Special Administrative Region of the People’s Republic of China established under the principle of “one country, two systems”.’); Lim, C L and Chan, Johannes, ‘Autonomy and Central-Local Relations’ in Johannes Chan and C L Lim (eds), Law of the Hong Kong Constitution (Sweet & Maxwell 2011) 49 .

2. See discussion below on the future development of the relationship between Mainland China and Hong Kong as we gradually approach 2047.

3. ‘Mainland and Hong Kong Closer Economic Partnership Arrangement’ (Trade and Industry Department (TID), 29 June 2003) <www.tid.gov.hk/english/cepa/files/main_e.pdf> accessed 31 October 2015.

4. Trade and Industry Department (TID), ‘Overview of CEPA: What is CEPA?’ (TID) <www.tid.gov.hk/english/cepa/cepa_overview.html> accessed 31 October 2015.

5. Lee, Y S, ‘Bilateralism under the World Trade Organization’ (2006) 26 Northwestern Journal of International Law & Business 357, 363 , citing GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Text (GATT Secretariat 1994) 522-525.

6. ibid.

7. CEPA, art 1.

8. ibid.

9. Trade and Industry Department (TID), ‘Overview of CEPA: Latest Development’ (TID) <www.tid.gov.hk/english/cepa/further_liberal.html> accessed 31 October 2015.

10. ibid.

11. CEPA, art 5(3); Trade and Industry Department (TID), ‘Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA): Trade in Goods’ (TID) <www.tid.gov.hk/english/cepa/tradegoods/tradegoods_intro.html> accessed 7 March 2017.

12. Trade and Industry Department (TID), ‘Overview of CEPA: Trade in Services’ (TID) <www.tid.gov.hk/english/cepa/tradeservices/trade_services.html> accessed 31 October 2015; Trade and Industry Department (TID), ‘Information on Database on CEPA Service Sectors: Measures and Regulations (by Service Sector)’ (TID) <www.tid.gov.hk/english/cepa/tradeservices/trade_services_requirement.html> accessed 31 October 2015.

13. Trade and Industry Department (TID), ‘Overview of CEPA: Mutual Recognition of Professional Qualification’ (TID) <www.tid.gov.hk/english/cepa/mutual/mutual.html> accessed 31 October 2015.

14. CEPA, arts 16-17; TID, ‘Mainland and Hong Kong Closer Economic Partnership Arrangement’ (n 3); Trade and Industry Department (TID), ‘Overview of CEPA: Trade and Investment Facilitation’ <www.tid.gov.hk/english/cepa/facilitation/summary_invest.html> accessed 31 October 2015.

15. Trade and Industry Department (TID), ‘The Mainland of China and Hong Kong Special Administrative Region Some Important Facts’ (TID) <www.tid.gov.hk/english/aboutus/publications/factsheet/china.html> accessed 26 March 2016.

16. ibid.

17. ibid.

18. ibid.

19. Ip, Eric C, Law and Justice in Hong Kong (2nd edn, Sweet & Maxwell 2016) 321 .

20. Gittings, Daniel, ‘What Will Happen to Hong Kong after 2047’ (2011) 42 California Western International Law Journal 37, 40 .

21. National Development and Reform Commission (NDRC), Ministry of Foreign Affairs, and Ministry of Commerce of the People’s Republic of China, ‘Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road’ (NDRC 28 March 2015) <http://en.ndrc.gov.cn/newsrelease/201503/t20150330_669367.html> accessed 13 September 2016.

22. Lam, Kin-chung, Hong Kong in the Belt and Road Initiative (Joint Publishing (HK) 2016); Lau, Lan-cheong and Ho, Yik-man, Will Hong Kong Bounce Back under ‘Belt & Road’ Initiative? (City University of Hong Kong Press 2016).

23. See Chan, Kenneth KL, ‘Taking Stock of “One Country, Two Systems”’ in YC Wong (ed), ‘One Country, Two Systems’ in Crisis: Hong Kong’s Transformation Since the Handover (Lexington Books 2007) 35, 54 ; Morris, Robert J, ‘The “Replacement” Chief Executive’s Two-Year Term: A Pure and Unambiguous Common Law Analysis’ (2005) 35 Hong Kong Law Journal 17, 22 , 24, as discussed in Gittings (n 20) 39.

24. Ip (n 19) 88-89.

25. Eric C Ip, ‘The Constitution of Economic Liberty in Hong Kong’ (2015) 26 Constitutional Political Economy 307, 323 .

26. Gittings (n 20) 51-54.

27. Zhonghuarenmingongheguo Fanlongduanfa (中华人民共和国反垄断法) [Anti-Monopoly Law of the People’s Republic of China (AML)] (promulgated by the Standing Committee of National People’s Congress, 30 August 2007, effective on 1 August 2008).

28. AML, art 1.

29. Zhang, Angela H, ‘Problems in Following EU Competition Law: A Case Study of Coca-Cola/Huiyuan’ (2011) 3 Peking University Journal of Legal Studies 96, 97 .

30. Chapter V, AML.

31. Harris, H Stephen , Jr and others, Anti-Monopoly Law and Practice in China (Oxford University Press 2011) 268 ,

referring to various Mainland Chinese provisions in n 28.

32. Competition Ordinance (c 619) 2012.

33. CO, s 6(1).

34. CO, s 21(1).

35. Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings [2004] OJ L24/1.

36. CO, Schedule 7.

37. The Hong Kong Commission shares its enforcement responsibilities with the Communications Authority for cases concerning the telecommunications and broadcasting markets: CO, s 159.

38. Hong Kong Competition Commission, ‘Legislation & Guidance: Guidance’ (Hong Kong Competition Commission) <www.compcomm.hk/en/legislation_guidance/guidance/guidance.html> accessed 7 February 2017. These guidelines include: the Guideline on the First Conduct Rule, the Guideline on the Second Conduct Rule, the Guideline on the Merger Rule, the Guideline on Complaints, the Guideline on Investigations, and the Guideline on Applications for a Decision under ss 9 and 24 (Exclusions and Exemptions) and s 15 Block Exemption Orders.

39. Hong Kong Competition Commission, ‘Enforcement Policy’ and ‘Leniency Policy for Undertakings Engaged in Cartel Conduct’ (Hong Kong Competition Commission November 2015) <www.compcomm.hk/en/legislation_guidance/policy_doc/policy_doc.html> accessed 13 September 2016.

40. ‘Government plans to fully commence Competition Ordinance on December 14, 2015’ (Press Release, Hong Kong Government 16 July 2015) <www.info.gov.hk/gia/general/201507/16/P201507160731.htm> accessed 31 October 2015.

41. CO, Part 6. For more details of the Hong Kong competition regime, see Kelvin HF Kwok, ‘The New Hong Kong Competition Law: Anomalies and Challenges’ (2014) 37 World Competition 541.

42. Dabbah, Maher M, International Law and Comparative Competition Law (Cambridge University Press 2010) 367, 594-595 ; World Trade Organization (WTO), ‘Working Group on the Interaction between Trade and Competition Policy - Communication from Hong Kong, China’ (WTO 10 September 1997), para 6 <https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=28491,26452,28590,28568,5405,38233,38234,5290,10979,9763&CurrentCatalogueIdIndex=1&FullTextHash=> accessed 8 February 2017; World Trade Organization (WTO), ‘Synthesis Paper on the Relationship of Trade and Competition Policy to Development and Economic Growth’ (WTO 18 September 1998), para 29 <http://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/WT/WGTCP/W80.DOC> accessed 7 February 2017; World Trade Organization (WTO), ‘Working Group on the Interaction between Trade and Competition Policy - Submission by the European Community and its Member States’ (WTO 24 November 1997), 4 <https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=18644,33911,20028,37447,40140,54031,43051,66442,41978,39801&CurrentCatalogueIdIndex=3&FullTextHash=> accessed 8 February 2017.

43. Diane P Wood, Antitrust Division, U.S. Department of Justice (USDOJ), Address, ‘Antitrust: A Remedy for Trade Barriers?’ (USDOJ 24 March 1995) <www.justice.gov/atr/speech/antitrust-remedy-trade-barriers> accessed 31 October 2015.

44. Dabbah (n 42) 582; WTO, ‘Synthesis Paper’ (n 42) paras 31-32.

45. Trade and Industry Department (TID), ‘Trade in Services: Measures and Regulations (by Service Sector)’ (TID) <www.tid.gov.hk/english/cepa/tradeservices/trade_services_requirement.html> accessed 31 October 2015.

46. Dabbah (n 42) 584-585.

47. Zhang, Angela H, ‘Bureaucratic Politics and China’s Anti-Monopoly Law’ (2014) 47 Cornell International Law Journal 671, 700-706 ; United States Chamber of Commerce, ‘Competing Interests in China’s Competition Law Enforcement: China’s Anti-Monopoly Law Application and the Role of Industrial Policy’ (US Chamber of Commerce 9 September 2014), 1-2, 53-56 <www.uschamber.com/sites/default/files/aml_final_090814_final_locked.pdf> accessed 7 February 2017.

48. AML, arts 13 and 14.

49. Martin, Stephen, Industrial Organisation in Context (Oxford University Press 2010) 552-554 .

50. Centraal Stikstof Verkoopkantoor (CSV) [1978] OJ L242/15, as discussed in Martin (n 49) 553-554.

51. ibid paras 1, 62.

52. ibid paras 60, 62.

53. ibid ss IIA-IIC, in particular para 71.

54. ibid para 68, as cited in Martin (n 49) 554.

55. Martin (n 49) 552-554.

56. ibid 552.

57. At the same time, Article 2 of the AML also provides that ‘it is applicable to monopolistic conducts outside the territory of the People’s Republic of China, which serve to eliminate or restrict competition on the domestic market of China’.

58. AML, art 13.

59. Harris (n 31) 84-85.

60. ibid 85.

61. ibid.

62. CO, ss 6 and 21; Brendan Sweeney, The Internationalisation of Competition Rules (Routledge 2010) 67.

63. Harris (n 31) 85.

64. Webb-Pomerene Act of 1918 of the United States, 15 United States Code s 62; Harris (n 31) 85 (citing and discussing this section).

65. Elhauge, Einer and Geradin, Damien, Global Competition Law and Economics (2nd edn, Hart Publishing 2011) 1138 .

66. CO, ss 8 and 23; AML, art 2.

67. Section 8 of the CO states:

‘The first conduct rule applies to an agreement, concerted practice or decision that has the object or effect of preventing, restricting or distorting competition in Hong Kong even if—

(a) the agreement or decision is made or given effect to outside Hong Kong;

(b) the concerted practice is engaged in outside Hong Kong;

(c) any party to the agreement or concerted practice is outside Hong Kong; or

(d) any undertaking or association of undertakings giving effect to a decision is outside Hong Kong.’

Section 23 of the CO states:

‘The second conduct rule applies to conduct that has as its object or effect the prevention, restriction or distortion of competition in Hong Kong even if—

(a) the undertaking engaging in the conduct is outside Hong Kong; or

(b) the conduct is engaged in outside Hong Kong.’

68. Elhauge and Geradin, (n 65) 1138.

69. ibid 1139.

70. ibid

71. ibid. See also CO, ss 93-94, sch 3.

72. Elhauge and Geradin (n 65) 1139.

73. Dabbah (n 42) 597.

74. Including Brazil, Canada, Japan, Korea, Portugal, Romania, Russia, and the United Kingdom: see the Organisation for Economic Co-operation and Development (OECD), ‘Competition co-operation and enforcement: Inventory of Co-operation Agreements: List of Agency-to-agency Memoranda of Understanding’ (OECD 2016) <www.oecd.org/daf/competition/competition-inventory-list-of-MOUs-interagency-agreements-cooperation.pdf> accessed 13 September 2016.

75. ‘Memorandum of Understanding on Cooperation in the area of anti-monopoly law between the European Commission and the NDRC and the SAIC of the People’s Republic of China’ (European Commission September 2012) <http://ec.europa.eu/competition/international/bilateral/mou_china_en.pdf> accessed 31 October 2015 (EU Memorandum).

76. ‘Memorandum of Understanding on Competition Cooperation between the Fair Trade Commission of the Republic of Korea and the SAIC of the People’s Republic of China’ (Korea Fair Trade Commission (KFTC) 30 May 2012) <www.ftc.go.kr/eng/solution/solution.jsp?file_name1=/files/bbs/2014/&file_name2=MOU(KFTC-SAIC).pdf> accessed 23 February 2017; ‘Memorandum of Understanding on Antimonopoly and Antitrust Cooperation between the Fair Trade Commission of the Republic of Korea and the NDRC of the People’s Republic of China’ (KFTC 30 May 2012) <www.ftc.go.kr/eng/solution/solution.jsp?file_name1=/files/bbs/2014/&file_name2=MOU(KFTC-NDRC).pdf> accessed 23 February 2017 (collectively the ‘Korean Memoranda’).

77. ‘Memorandum of Understanding on Antitrust and Antimonopoly Cooperation between the United States Department of Justice and Federal Trade Commission and the People’s Republic of China NDRC, MOFCOM, and SAIC’ (Federal Trade Commission 27 July 2011) <www.ftc.gov/sites/default/files/attachments/international-antitrust-and-consumer-protection-cooperation-agreements/110726mou-english.pdf> accessed 31 October 2015 (US Memorandum).

78. ‘Memorandum of Understanding on Cooperation between the SAIC of the People’s Republic of China and the Australian Competition and Consumer Commission’ (Australian Competition and Consumer Commission 18 September 2012), art 2 <www.accc.gov.au/system/files/Memorandum%20of%20understanding%20between%20the%20SAIC%20of%20the%20PRC%20and%20the%20ACCC.pdf> accessed 13 September 2016 (Australia-SAIC Memorandum); EU Memorandum (n 75) paras 2.1, 2.3; US Memorandum (n 77) 2.

79. EU Memorandum (n 75) para 2.3.

80. US Memorandum (n 77) 2-3.

81. Korean Memoranda (n 76), art 3 (for both).

82. Dabbah (n 42) 496-498; Taylor, Martyn D, International Competition Law: A New Dimension for the WTO? (Cambridge University Press 2006) 107-113 ; ‘Memorandum of Understanding on Cooperation between the NDRC of the People’s Republic of China and the Australian Competition and Consumer Commission’ (Australian Competition and Consumer Commission 30 October 2015 and 5 November 2015), art 4 <www.accc.gov.au/system/files/Memorandum%20of%20understanding%20between%20the%20National%20Development%20and%20Reform%20Commission%20and%20the%20Australian%20Competition%20and%20Consumer%20Commission.pdf> accessed 13 September 2016 (Australia-NDRC Memorandum); Agreement between the Government of the United States of America and the Commission of the European Communities Regarding the Application of their Competition Laws [1995] OJ L95/47, art VI <http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:21995A0427(01)&from=EN> accessed 31 October 2015 (1991 EU/US Agreement).

83. ‘Memorandum of Understanding between the Competition Commission of the Hong Kong Special Administrative Region of the People’s Republic of China and the Commissioner of Competition, Competition Bureau of the Government of Canada Regarding the Application of Competition Laws And the Sharing of Information’ (Hong Kong Competition Commission 2 December 2016) <www.compcomm.hk/en/about/inter_agency/files/MOU_CCB_signed.pdf> accessed 7 February 2017 (HK-Canada Memorandum); Hong Kong Competition Commission, ‘Competition Commission Signs MOU with Canadian Competition Bureau to Strengthen Cooperation in Competition Policy and Enforcement’ (Hong Kong Competition Commission 5 December 2016) <www.compcomm.hk/en/media/press/files/20161205_Competition_Commission_signs_MOU_with_Canadian_Competition_Bureau_e.pdf> accessed 7 February 2017. The rest of this paragraph is based on these sources.

84. HK-Canada Memorandum (n 83) para 1.

85. On exchange of information, see HK-Canada Memorandum (n 83) paras 13-20.

86. Taylor (n 82) 111-112 (emphasis added).

87. See, e.g. Australian-SAIC Memorandum (n 78) art 6; EU Memorandum (n 75) paras 5.2-5.3; US Memorandum, (n 77) 3.

88. Taylor (n 82) 111.

89. ‘Competition Law’ (Wikipedia) <https://en.wikipedia.org/wiki/Competition_law> accessed 13 September 2016.

90. 1991 EU/US Agreement (n 82).

91. 1991 EU/US Agreement (n 82) art III, paras 1-2.

92. European Commission (EC), ‘Bilateral Relations: United States of America’ (EC) <http://ec.europa.eu/competition/international/bilateral/usa.html> accessed 31 October 2015.

93. 1991 EU/US Agreement (n 82) art V, para 2 (emphasis added).

94. Agreement between the European Communities and the Government of the United States of America on the application of positive comity principles in the enforcement of their competition laws [1998] OJ L173/28 <http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:21998A0618(01)> accessed 31 October 2015.

95. ibid, preamble.

96. ibid, art I, para 1(a), art III.

97. ibid, art III.

98. ibid, art IV.

99. ibid, art I, para 2(a) (emphasis added).

100. ibid; 1991 EU/US Agreement (n 82), art V, para 2.

101. 1991 EU/US Agreement (n 82), art V(2) and (3).

102. 1998 EU/US Agreement (n 94) art I, para 2; 1991 EU/US Agreement (n 82) art V.

103. As discussed in Dabbah (n 42) 514-515.

104. US Department of Justice (USDOJ), ‘Justice Department Asks European Communities to Investigate Possible Anticompetitive Conduct Affecting US Airlines’ Computer Reservation Systems: First Formal Investigation Request by Department to European Communities’ (Press Release, USDOJ 28 April 1997) <www.justice.gov/archive/atr/public/press_releases/1997/229081.htm> accessed 13 September 2016; European Commission (EC), ‘Commission Opens Procedure Against Air France for Favouring Amadeus Reservation System’ (Press Release, EC 15 March 1999) <http://europa.eu/rapid/press-release_IP-99-171_en.htm> accessed 13 September 2016; European Commission (EC), ‘Commission Acts to Prevent Discrimination between Airline Computer Reservation Systems’ (Press Release, EC 25 July 2000) <http://europa.eu/rapid/press-release_IP-00-835_en.htm> accessed 13 September 2016. The rest of this paragraph is based on these sources.

105. US Department of Justice (USDOJ), ‘Justice Department Asks European Communities to Investigate Possible Anticompetitive Conduct Affecting US Airlines’ Computer Reservation Systems: First Formal Investigation Request by Department to European Communities’ (Press Release, USDOJ 28 April 1997) <www.justice.gov/archive/atr/public/press_releases/1997/229081.htm> accessed 13 September 2016.

106. Dabbah (n 42) 515.

107. ibid 521.

108. ibid.

109. ibid 517-518; Taylor (n 82) 112-113; Laciak, Christine (ed.), International Antitrust Cooperation Handbook (Chicago: ABA, Section of Antitrust Law 2004) 76 .

110. 1991 EU/US Agreement (n 82) art III.

111. Dabbah (n 42) 517-518; Taylor (n 82) 112-113; Laciak (n 109) 76.

112. ‘USA/Australia Mutual Antitrust Enforcement Assistance Agreement’ (Federal Trade Commission April 1999) <www.ftc.gov/policy/cooperation-agreements/usaaustralia-mutual-antitrust-enforcement-assistance-agreement> accessed 13 September 2016.

113. ibid, art II, A and F.

114. ibid, art VIA.

115. Federal Trade Commission (FTC), ‘First International Antitrust Assistance Agreement under New Law Announced by FTC and DOJ’ (Press Release, FTC 17 April 1997) <www.ftc.gov/news-events/press-releases/1997/04/first-international-antitrust-assistance-agreement-under-new-law> accessed 13 September 2016. The rest of this paragraph is based on this source.

116. International Antitrust Enforcement Assistance Act of 1994 of the United States, s 6202(b).

117. ibid s 6202(c).

118. ibid s 6205; Laciak (n 109) 77; Dabbah (n 42) 517-518; Taylor (n 82) 114.

119. Laciak (n 109) 76, 81.

120. FTC (n 115).

121. US/Australia MLA, arts II and III.

122. FTC (n 115).

123. Taylor (n 82) 115; Dabbah (n 42) 517-520.

124. FTC (n 115); Laciak (n 109) 71, 76 (citing at page 71, Christine Varney, ‘Cooperation Between Enforcement Agencies: Building Upon the Past’, (Federal Trade Commission, 25 July 1995) <www.ftc.gov/es/public-statements/1995/07/cooperation-between-enforcement-agencies-building-upon-past> accessed 8 February 2017.

125. FTC (n 115); Taylor (n 82) 115.

126. Taylor (n 82) 115.

127. Harris (n 31) 268.

128. ‘LCQ2: Police co-operation mechanism between Hong Kong and Mainland’ <www.info.gov.hk/gia/general/201601/27/P201601270512.htm> (Press Release, HKSAR Government 27 January 2016) accessed 13 September 2016. The rest of this paragraph is partly based on this source.

129. Hong Kong Department of Justice (HKDOJ), ‘Arrangements on the Establishment of a Reciprocal Notification Mechanism between the Mainland Public Security Authorities and the Hong Kong Police’ (HKDOJ) <www.doj.gov.hk/eng/topical/pdf/mainlandmutual3e.pdf> accessed 13 September 2016.

130. Hong Kong Department of Justice (HKDOJ), ‘Mainland Related Projects and Cooperative Arrangements’ (HKDOJ) <www.doj.gov.hk/eng/topical/mainlandlaw.html> accessed 13 September 2016.

131. Gittings (n 20) 40.

132. Cox, Owen, Moody, Marcy N, and Johnston, Graeme, ‘Mainland China: Introduction’ in Graeme Johnston (ed), Competition Law in China and Hong Kong (Sweet & Maxwell 2009) 26-28 .

133. ibid 29-31.

134. ibid 31.

135. ibid 32.

136. ‘Cooperation Agreement between the Australian Competition and Consumer Commission and the New Zealand Commerce Commission’ (Australian Competition and Consumer Commission 31 July 2007) <www.accc.gov.au/system/files/Cooperation%20agreement%20between%20the%20ACCC%20%26%20the%20NZCC.pdf> accessed 13 September 2016 (2007 Australia/New Zealand Agreement).

137. ibid; Dabbah (n 42) 505-506.

138. Dabbah (n 42) 496-498; Taylor (n 82) 107-113; Australia-NDRC Memorandum (n 82) art 4; 1991 EU/US Agreement (n 82) art VI.

139. 1991 EU/US Agreement (n 82) art VI(1).

140. 2007 Australia/New Zealand Agreement (n 136) para 10.2.

141. 1991 EU/US Agreement (n 82) art VI.

142. 1998 EU/US Agreement (n 94) art III.

143. Dabbah (n 42) 503. Note that ‘double illegality’ is not a pre-requisite for positive comity co-operation between the EU and the US, according to art III of the 1998 EU/US Agreement: Dabbah (n 42) 503.

144. See n 15-18 and accompanying text.

145. In respect of ‘pure’ export cartels, the position is clear under Hong Kong law: they do not violate the first conduct rule (under s 6 of the CO) insofar as they are originated from Hong Kong but only harm competition outside Hong Kong, and hence fall outside the investigative powers of the Hong Kong Commission under the CO: see s 39(2) of the CO (which provides that ‘the Commission may only conduct an investigation under this Part if it has reasonable cause to suspect that a contravention of a competition rule has taken place, is taking place or is about to take place’). The position is less clear under the AML in Mainland China: as discussed above, it is not clear whether ‘pure’ export cartels with harmful effects external to Mainland China constitute an infringement of the AML; but assuming they do not (because of the exemption under Article 15(6)), it would appear that the Mainland Chinese authorities do not have authority to investigate such cases: see art 38, AML (which provides that ‘[t]he authority for enforcement of the Anti-monopoly Law shall investigate any suspected monopolistic conduct according to law’).

146. Shangye Gongzuo Zhong Guojia Mimi Ji Miji Juti Fanwei De Guiding (商业工作中国家秘密及密级具体范围的规定) [Rules on Specific Definition of State Confidentiality and Its Coverage in Commercial Activities] (promulgated by the Ministry of Commerce of the People’s Republic of China, 29 September 1989, effective 29 September 1989).

147. Zhonghuarenmingongheguo Baoshouguojiamimifa Shishi Tiaoli (中华人民共和国保守国家秘密法实施条例) [Regulation on the Implementation of the Law of the People’s Republic of China on Guarding State Secrets] (promulgated by the State Council of the People’s Republic of China, 17 January 2014, effective 1 March 2014) Order No 646, art 5.

148. Taylor (n 82) 115.

149. Duiwaimaoyijingjihezuobu Guanyu Gongying Gangao Xianhuolengdongshangpin Zhudongpeieguanli Zanxingguiding (对外贸易经济合作部关于供应港澳鲜活冷冻商品主动配额管理暂行规定) [Provisional Regulations of the Ministry of Foreign Trade and Economic Cooperation on the Administration of Voluntary Quotas of Fresh, Live and Frozen Commodities Supplied to Hong Kong and Macao] (promulgated by the Ministry of Commerce of the People’s Republic of China, 1 July 1995); Xinhuanet, ‘Sharp Increase in the Prices of Chinese Medicine Resulted from Mainland Chinese Export Restrictions’ Xinhuanet (China, 10 October 2011) <http://news.xinhuanet.com/world/2011-10/10/c_122136791.htm> accessed 31 October 2015; General Administration of Customs of the People’s Republic of China, ‘What Kinds of Goods Have been Added to the “Catalogue of Export Forbidden Items”?’ (30 August 2005) <www.customs.gov.cn/publish/portal0/tab3400/info5329.htm> accessed 31 October 2015; Permanent Mission of the People’s Republic of China to the United Nations and other International Organizations in Vienna (PRC Permanent Mission), ‘Certain Chemicals and Related Equipment and Technologies Export Control List’ (PRC Permanent Mission 19 January 2002) <www.fmprc.gov.cn/ce/cgvienna/eng/dbtyw/fks/t127630.htm> accessed 9 March 2017.

150. See n 15 and accompanying text.

151. In re Vitamin C Antitrust Litigation 837 F.3d 175, 180 (2d Cir. 2016) (Vitamin C (Second Circuit)), overturning the decision of the United States District Court for the Eastern District of New York in In re Vitamin C Antitrust Litigation 810 F Supp 2d 522 (EDNY 2011) (Vitamin C (District Court)).

152. Vitamin C (District Court) (n 151) 524.

153. ibid 544.

154. US Department of Justice (USDOJ) and Federal Trade Commission (FTC), ‘Antitrust Enforcement Guidelines for International Operations’ (USDOJ April 1995) <www.justice.gov/atr/public/guidelines/internat.htm> accessed 31 October 2015.

155. ibid, section 3.32.

156. 307 F Supp 1291 (D Del 1970).

157. ibid 1292.

158. ibid 1296.

159. ibid 1298.

160. Vitamin C (District Court) (n 151) 544-545.

161. Mannington Mills, Inc v Congoleum Corp 595 F 2d 1287, 1293 (3rd Cir 1979).

162. Spencer W Waller, Antitrust and American Business Abroad (3rd edn, Thomson/West 2011) para 8:23, fn 6, as cited in Vitamin C (District Court) (n 151) 544.

163. Vitamin C (District Court) (n 151) 548, fn 33. See also United States v Sisal Sales Corp 274 US 268, 276 (1927); Mannington Mills (n 161) 1293; Timberlane Lumber Co v Bank of America 549 F 2d 597, 606-607 (9th Cir 1976); Interamerican Refining Corp (n 156) 1297.

164. Vitamin C (District Court) (n 151) 544, citing US Guidelines (n 154) s 3.32; Brief for the United States as Amicus Curiae Supporting Petitioners, Matsushita Electric Industrial Co v Zenith Radio Corp (No. 83-2004), 1985 WL 669667, 24-25.

165. Vitamin C (Second Circuit) (n 151) 182-194.

166. ibid 180, 186, 189.

167. ibid 189.

168. ibid.

169. ibid 190.

170. ibid 192.

171. ibid 193.

172. Timberlane Lumber (n 163) 606-607; Mannington Mills (n 161) 1292-1293.

173. [2010] 3 HKLRD 611.

174. ibid [27]-[31].

175. ibid [54]-[90].

176. [2001] ABCA 112.

177. ibid [45] and [55], as cited in Hua Tian Long (n 173) [40].

178. Hua Tian Long (n 173) [43].

179. Western Surety Co v Elk Valley Logging Ltd (1985) 23 DLR (4th) 464 (BCSC); Phillips (Guardian ad litem) v Beary (1994) 29 CPC (3d) 258 (BCSC)); Bouchard v JL Le Saux Ltee (1984) 45 OR (2d) 792, as cited in Hua Tian Long (n 173) [36].

180. Hua Tian Long (n 173) [36].

181. Cox, Moody and Johnston, (n 132) 31-32. The authors noted (at 32) that ‘[a]s of 2007, China’s private sector accounted for more than 40 percent of GDP, 60 percent of growth and 75 percent of new jobs’.

182. Cox, Moody and Johnston (n 132) 32-33.

183. Hua Tian Long (n 173) [52].

184. ibid.

185. ibid [112].

186. ibid [118] and [125].

187. Cases C-359/95 P, C-379/95 P [1997] ECR I-6265.

188. ibid [33].

189. [1974] OJ L343/19.

190. ibid, s II.1. The Commission nevertheless held that: ‘The facts ... do constitute measures … imposed on Japanese undertakings by the Japanese authorities nor even, to the Commission’s knowledge, authorized by those authorities; these are bilateral measures of a private nature, which have not been the subject of any government intervention from either the French or the Japanese side. These measures may, therefore, come within the terms of Article [101]’: s II.1. Cf Vivien Rose and David Bailey (eds), Bellamy & Child: European Union Law of Competition (7th edn, Oxford University Press 2013), para 11.004 (‘Although the question of whether mandatory measures by a non-Member State may shield an agreement or conduct from the application of competition law has not been conclusively decided, it seems that the same principle should be applied in such a case.’).

191. Case COMP/39258, provisional non-confidential version of the Commission decision of 9.11.2010 published on 08.05.2015.

192. ibid footnote 1198.

193. Case C-280/08 P Deutsche Telekom v Commission [2010] ECR I-9555, para 82.

194. Cases 89/85, 104/85, 114/85, 116/85, 117/85, 125-129/85 Ahlström Osakeyhtiö and Others v Commission (I) [1988] ECR 5193, para 20.

195. Cases 40-48/73, 50/73, 54-56/73, 111/73, 113-114/73 Suiker Unie v Commission [1975] ECR 1663, para 24. See also Deutsche Telekom (n 193) para 80; Rose and Bailey (eds) (n 190) para 11.006.

196. See n 163 and accompanying text.

197. Case T-387/94 [1996] ECR II-961.

198. ibid para 60.

199. ibid para 61.

200. ibid para 65.

201. See n 164 and accompanying text.

202. Vitamin C (Second Circuit) (n 151) 182-194.

203. Airfreight (n 191) para 1013.

204. ibid paras 1, 12-64, 966, 1006.

205. ibid paras 966-1013.

206. Airfreight (n 191) para 1004.

207. ibid para 1014.

208. Section 2 of Schedule 1 to the CO states that:

‘(1) The first conduct rule does not apply to an agreement to the extent that it is made for the purpose of complying with a legal requirement.

(2) The second conduct rule does not apply to conduct to the extent that it is engaged in for the purpose of complying with a legal requirement.

(3) In this section— “legal requirement” ([Chinese characters omitted]) means a requirement—

(a) imposed by or under any enactment in force in Hong Kong; or

(b) imposed by any national law applying in Hong Kong.’

209. CO, sch 1, para 2(3).

210. Hong Kong Interpretation and General Clauses Ordinance (Cap 1), s 3.

211. Basic Law, art 18, para 3.

212. Shearman & Sterling, ‘Vitamin C Purchasers Awarded $162 Million in First-Ever Civil Price-Fixing Verdict Against Chinese Companies’ (Shearman & Sterling 1 April 2013) 5 <www.shearman.com/~/media/Files/NewsInsights/Publications/2013/04/Vitamin-C-Purchasers-Awarded-$162-Million-in-Fir__/Files/View-full-memo-Vitamin-C-Purchasers-Awarded-162-__/FileAttachment/Vitamin-C-Purchasers-Awarded-$162-Million-in-Fir__.pdf> accessed 9 August 2014.

213. Vitamin C (Second Circuit) (n 151) 194.

214. See n 164, nn 199-201, and accompanying text.

215. Hua Tian Long (n 173) para 43; Vitamin C (District Court) (n 151) 544.

216. Williams, Mark, Competition Policy in China, Hong Kong and Taiwan (Cambridge University Press 2009) 121 .

217. United States Trade Representative (USTR), ‘2013 Report to Congress on China’s WTO Compliance’ (USTR December 2013), 43 <www.ustr.gov/sites/default/files/2013-Report-to-Congress-China-WTO-Compliance.pdf> accessed 31 October 2015; World Trade Organization (WTO), ‘China – Measures Related to the Exportation of Various Raw Materials’ (WTO 6 May 2013) <www.wto.org/english/tratop_e/dispu_e/cases_e/ds394_e.htm> accessed 31 October 2015; World Trade Organization (WTO), ‘China – Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum: Reports of the Panel’ (WTO 26 March 2014) para 7.200 <www.wto.org/english/tratop_e/dispu_e/431_432_433r_e.pdf> accessed 9 August 2014.

218. Resco Products, Inc v Bosai Minerals Group Co, Ltd No. 06-235, 2010 WL 2331069, 1 (W D Pa June 4, 2010).

219. ibid 1-4, 6, 8. The stay was subsequently lifted following the WTO panel’s decision against China: see Resco Products, Inc v Bosai Minerals Group Co, Ltd 158 F Supp 3d 406, 416 (W D Pa 2016); WTO, ‘China – Measures Related to the Exportation of Various Raw Materials’ (n 217).

* Assistant Professor, Faculty of Law, University of Hong Kong; Barrister-at-Law, Des Voeux Chambers, Hong Kong. The author wishes to thank his research assistants for their excellent research assistance, and the University of Hong Kong for its generous funding support under the Small Project Funding scheme (Project Code: 201309176238). This article does not represent the views of the organizations with which the author is affiliated.

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Asian Journal of Comparative Law
  • ISSN: 2194-6078
  • EISSN: 1932-0205
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