[Home](/)/[Resources](/resources)/HK Competition Ordinance Hong KongLegal guide # Hong Kong Competition Ordinance for Electronics Companies The Competition Ordinance (Cap 619) prohibits anti-competitive agreements and abuse of market power in Hong Kong. For electronics hardware companies, the most relevant risks are resale price maintenance in distribution agreements, information-sharing with competitors, and exclusivity arrangements by companies with substantial market power — all enforceable by the HKCC with financial penalties up to 10% of Hong Kong turnover per year of infringement. Copy Link[Share on WhatsApp](https://wa.me/?text=https%3A%2F%2Fkrono-labs.com%2Fguides%2Fhong-kong-competition-ordinance) At a glance Ordinance Cap 619 Regulator HKCC Max penalty 10% HK turnover × 3 years No merger control Unlike most jurisdictions ## Core prohibitions ### First Conduct Rule: anti-competitive agreements The First Conduct Rule prohibits agreements, concerted practices, and decisions between undertakings that have the object or effect of preventing, restricting, or distorting competition in Hong Kong. For electronics companies, this covers price-fixing agreements with distributors or competitors, market-sharing arrangements, bid-rigging, and output restrictions — regardless of whether the agreement is written or informal. ### Second Conduct Rule: abuse of substantial market power The Second Conduct Rule prohibits undertakings with a substantial degree of market power from abusing that power to prevent, restrict, or distort competition in Hong Kong. Relevant conduct includes predatory pricing, exclusive dealing that forecloses competitors, tying and bundling that leverages market power into adjacent markets, and refusals to deal without objective justification. ### Hong Kong Competition Commission (HKCC) enforcement The Competition Commission investigates suspected contraventions, can accept commitments from parties to change their conduct, and brings cases to the Competition Tribunal for adjudication. The Tribunal can impose financial penalties of up to 10% of Hong Kong turnover for each year of infringement (up to three years). Leniency is available for cartel participants who self-report before an investigation is opened. ### Implications for hardware distribution and IP licensing Electronics companies operating in Hong Kong should assess resale price maintenance in distribution agreements (typically caught by the First Conduct Rule), most-favoured-nation clauses in platform agreements, and the terms on which standard-essential patent (SEP) licences are offered — all are areas where the HKCC has signalled active interest and guidance. ## Compliance steps 01 Audit existing distribution agreements for resale price maintenance clauses, territorial restrictions that go beyond protecting legitimate IP, and any clauses that coordinate pricing or market allocation between competing parties. 02 Review any arrangements with competitors — including joint ventures, standard-setting participation, and information-sharing agreements — against the First Conduct Rule, bearing in mind that 'object' restrictions (like price-fixing) are presumed anti-competitive without the need to show market effect. 03 If your company holds a significant market share in any Hong Kong electronics market segment, assess whether commercial practices (exclusivity terms, rebate structures, bundling) could constitute abuse of a substantial degree of market power under the Second Conduct Rule. 04 Train relevant commercial and sales staff on competition law basics — HKCC guidance is available in English and Chinese and covers common scenarios in distribution, procurement, and trade association participation. 05 Implement a compliance programme proportionate to your company's size and market position: a smaller distributor needs awareness training; a market-dominant platform needs formal compliance monitoring and legal sign-off on commercial terms. 06 If a potential infringement is identified, assess whether leniency or a voluntary commitment to the HKCC is the appropriate response — early engagement typically results in better outcomes than waiting for an investigation to be opened. 07 For M&A activity involving Hong Kong businesses or market positions, note that the Competition Ordinance does not currently have a merger control regime (unlike most jurisdictions), but parties should still assess whether post-merger conduct could raise First or Second Conduct Rule concerns. ## Frequently asked questions ### Does the Competition Ordinance apply to foreign companies with no Hong Kong office? Yes — the Ordinance applies to conduct that has the effect of restricting competition in Hong Kong regardless of where the parties are incorporated or based. A foreign manufacturer that coordinates pricing with a Hong Kong distributor, or whose online platform restricts competition in Hong Kong markets, is within scope even without a physical presence. ### Are SMEs exempt from the Competition Ordinance? There is no formal SME exemption, but the HKCC's enforcement priorities focus on conduct with material impact on Hong Kong markets. The Ordinance includes a de minimis exclusion for agreements between undertakings whose combined Hong Kong turnover falls below a threshold set by the Commission — check current HKCC guidance for the applicable thresholds, as they are reviewed periodically. ### Is resale price maintenance automatically illegal in Hong Kong? Resale price maintenance (RPM) — requiring distributors to sell at or above a minimum price — is treated as a serious restriction under the First Conduct Rule and is very likely to be found anti-competitive. The HKCC's guidance identifies RPM as a significant concern. Recommended retail prices are generally permissible so long as they are genuinely non-binding. ### What is the leniency programme and how does it work? The HKCC offers leniency to the first cartel participant to self-report before an investigation is formally opened. The first-in leniency applicant can receive immunity from financial penalties in exchange for full cooperation, including providing information and evidence about the cartel. Subsequent applicants may receive reduced penalties. Leniency does not protect against private damages actions in the Competition Tribunal. **Disclaimer:** Educational resource only. Competition law analysis is highly fact-specific. Consult a qualified competition law practitioner before modifying distribution agreements or commercial terms in Hong Kong. 🇭🇰 Hong Kong roadmap for your product Every standard, document, and test that applies — free, no account required. See your free roadmap[ Want an expert to take your product through 🇭🇰 Hong Kong compliance for you? One consultant from Krono's compliance team takes your product from requirements to legal sale, with a fixed quote before any work starts. See compliance services](/services) Learn this properly In-depth course that teaches the full process, not just this one answer. [Start the course — $149](/courses/62-hong-kong-ofca-radio-equipment-certification)[Prefer to read? 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