Hong Kong’s First Competition Law: Impact on Construction Contracting

After years of consultation and debate, Hong Kong finally enacted its first-ever cross-sector competition law. The Competition Ordinance (the Ordinance) was enacted on 14 June 2012, and implementation of the provisions is expected to come into effect towards the end of 2013. Hong Kong is used to practice laissez faire economic policy. The enactment of a competition law is seen to be a major policy change and may affect the business environment. Furthermore, the cross-sector Ordinance shall have an impact on the construction supply chain. The current practices in construction contracting need to be scrutinized and reviewed in the light of the new rules. Even if the practices do not violate these rules, it is instrumental to prepare industry-specific guidelines to guard against any potential minefields of anticompetition activities. This paper introduces the key features and the development of the Ordinance. This paper also compares the Ordinance with its counterparts in the United States and European Union. To study the impact of the Ordinance on construction, the critical antitrust issues and minefields of the anticompetition conducts are discussed. Ways for the construction industry to avoid infringement of the Ordinance are also suggested.