Current Consultation

Consultation under section 2, Schedule 2 to the Competition Ordinance regarding the Commission’s proposal to accept commitments in the Hong Kong Seaport Alliance case

On 12 August 2020, the Competition Commission ("Commission") published proposed commitments from four port terminal operators, namely Hongkong International Terminals Limited, Modern Terminals Limited ("MTL"), COSCO-HIT Terminals (Hong Kong) Limited and Asia Container Terminals Limited (together the “Parties”) in relation to the Hong Kong Seaport Alliance (“Alliance”).

The Commission has conducted an investigation under section 39 of the Competition Ordinance (Cap. 619) (“Ordinance”) into a contractual joint venture between the Parties concerning their joint operations under the Alliance at the Kwai Tsing container port terminal (“Kwai Tsing”) in the Hong Kong Special Administrative Region of the People’s Republic of China.

The Commission’s investigation found that the Alliance likely gives rise to anti-competitive effects in the market for port terminal services for Gateway cargo, as well as in related markets for the provision of overflow services to the operator of Container Terminal 3 at Kwai Tsing and for the provision of various services at Kwai Tsing to parties other than the shipping lines.

In response to the investigation, the Parties have offered commitments under section 60 of the Ordinance whereby they will:

• cap their charges for services to shipping lines in respect of Gateway cargo to the level applicable to each customer on 1 April 2019 (subject to indexation);
• provide a minimum service level for gate access to Kwai Tsing and the turnaround time for truck services at the port;
• cap their charges for services related to Gateway cargo to parties other than shipping lines to the level applicable on 1 April 2019 (subject to indexation);
• maintain reciprocal overflow arrangements with the operator of Container Terminal 3 on terms that are no less favourable to the operator than as at 1 April 2019 (subject to indexation); and
• ensure that no MTL representatives appointed to serve on the governing committees of the Alliance are appointed as directors of the terminal operators of the ports of Chiwan and Shekou.

These proposed commitments would last for up to 8 years from their effective date, with the exception of the proposed commitment for service levels, which would last for the duration of the Alliance. Compliance with the proposed commitments would be monitored by an independent monitoring trustee on behalf of the Commission.

In accordance with the procedure set out in section 2, Schedule 2 to the Ordinance, the Commission invites interested parties to submit representations in writing on the proposed commitments.

In addition to the proposed commitments, the Commission has published an FAQs document to provide further useful information on the relevant provisions mentioned above, the commitments given by the Parties and the consultation.

The documents published are:

• Notice issued under section 2, Schedule 2 to the Ordinance of the proposed commitments; and
• Annexed to the Notice, the proposed commitments.

For FAQs, click here. For a copy of the press release, click here.

Further details on how to submit a representation to the Commission are outlined in the above Notice issued under section 2, Schedule 2 to the Ordinance of the proposed commitments.

The period for accepting representations on the proposed commitments from the Hong Kong Seaport Alliance in Case EC/03AY is now closed.

To view the representations received to date, please click here.