The Communications Authority ("CA") today (19 November 2015) announced for public information its position on handling leniency applications in respect of the telecommunications and broadcasting sectors under the Competition Ordinance (Cap. 619) ("CO") upon its full implementation on 14 December 2015.
Having considered the views received from the telecommunications and broadcasting sectors, and taking into account its experiences in enforcing the competition provisions under the Telecommunications Ordinance (Cap. 106) ("TO") and the Broadcasting Ordinance (Cap. 562) ("BO") since 2000, the CA has decided not to adopt a leniency policy for its enforcement of the CO, either on its own or jointly with the Competition Commission ("Commission"), for the time being.
"Following the full commencement of the CO on 14 December 2015, the CA may, in accordance with the relevant provisions of the CO and the actual circumstances of the cases on which it has concurrent jurisdiction with the Commission, consider making leniency agreements with the telecommunications and broadcasting licensees on a case-by-case basis," a spokesman of the CA said.
"With the accumulation of enforcement experiences under the CO, the CA would, in consultation with the telecommunications and broadcasting sectors, revisit at a later time the need or otherwise for it to adopt a leniency policy, and if so, the underlying principles of the policy," the spokesman added.
As required under the CO, the CA and the Commission will sign a Memorandum of Understanding ("MoU") upon the full commencement of the CO to coordinate the performance of their functions on which they have the concurrent jurisdiction. Competition cases, including the related leniency applications, will be handled by the two competition authorities according to the arrangements set out in the MoU.
In accordance with the principles agreed by the CA and the Commission under the MoU, for cases involving the telecommunications or broadcasting sectors and falling within the concurrent jurisdiction, the CA will ordinarily take the role of the lead authority ("Lead Authority"), which will assume responsibility for exercising the relevant powers and functions conferred upon it under the CO. Telecommunications or broadcasting licensees intending to apply for leniency under the CO should approach the CA, which will consider such requests on a case-by-case basis. If the Commission receives any leniency applications in relation to cases which fall within the concurrent jurisdiction and therefore will, according to the MoU, ordinarily be taken up by the CA as the Lead Authority, the Commission will defer the applications to the CA for consideration.
For matters involving issues that are partly within and partly outside the concurrent jurisdiction, the CA and the Commission will discuss and agree on how best to progress the matter on a case-by-case basis, including the arrangements for the Lead Authority to offer leniency agreements.
The CA has advised the telecommunications and broadcasting licensees direct of its above position on leniency agreements separately.
Background
Under section 159 of the CO, the CA is conferred concurrent jurisdiction with the Commission to perform the functions of the Commission under the CO in so far as they relate to the conduct of undertakings that are licensees under the TO or BO, persons whose activities require them to be licensed under the TO or BO, and persons who have been exempted from the TO or from specified provisions of the TO under section 39 of the TO. Section 161 of the CO further stipulates that the CA and the Commission must prepare and sign an MoU to coordinate the performance of the functions of the CA and the Commission under the CO.
Under section 80 of the CO, the Commission/the CA may, in exchange for a person's cooperation in an investigation or in proceedings, make a leniency agreement with the person that it will not bring or continue proceedings for a pecuniary penalty against that person in respect of an alleged contravention of a conduct rule.
On 23 September 2015, the Commission issued the draft leniency policy for undertakings engaged in cartel conduct for public consultation until 23 October 2015. On the same day, the CA issued a circular letter to the telecommunications and broadcasting licensees informing them that the CA kept an open mind on whether it should adopt, on its own or jointly with the Commission, a leniency policy for the telecommunications and broadcasting sectors, and if so, when that should take place, and invited them to express their views.
Following the public consultation, the Commission intends to issue its leniency policy before the CO commences full operation on 14 December 2015.
Communications Authority
19 November 2015