SMEs thrive in economies with competition law. As consumers, SMEs can be victims of anti-competitive conduct where there is no law in place to prevent such practices and deter such conduct. The Competition Ordinance (Ordinance) brings SMEs in Hong Kong the protections available to SMEs in many other jurisdictions in the world. With protections come responsibilities and SMEs have four main ones - The Four Don'ts.
Regardless of their size, there are four things businesses should never agree with their competitors to do, i.e.:
DON'T fix prices
DON'T restrict output
DON'T share markets
DON'T rig bids
Such arrangements, known as Cartels, undermine the competitive process and contravene the First Conduct Rule of the Ordinance. The Commission will take actions to stamp out such practices where they impact Hong Kong. This may include taking actions against the individuals involved in Cartels, as well as their businesses.
Please click here to learn more about Cartels.
If SMEs are part of a Cartel and they wish to withdraw from it, they should seek legal advice and consider applying for leniency under the Commission's Leniency Policy for Undertakings Engaged in Cartel Conduct.
SMEs can use the Ordinance to protect themselves
By acting alone and making tactical decisions, such as selling items below cost, bundling own products for sale together or refuse to supply someone, SMEs will not harm the competition in the market. In limited circumstances, very large businesses (with substantial market power) making the same decisions may harm competition.
If SMEs feel a very large business has harmed competition through anti-competitive conduct, such as stifling innovation or quashing their ability to compete, they should complain to the Competition Commission (Commission).