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Law360 (March 27, 2020, 4:22 PM EDT) -- Hong Kong's Competition Commission on Friday issued its own version of guidance for companies who may need to collaborate on joint buying and production or share information as they scramble to fill orders and adapt to the challenges of the COVID-19 pandemic.
The commission said in a statement that it will continue to enforce Hong Kong's Competition Ordinance during the novel coronavirus outbreak, while recognizing like many of its peers that there's a potential, temporary need for "additional cooperation between businesses in certain industries" to ensure the continued flow of essential goods and services.
"The commission intends to take a pragmatic approach in its enforcement and advisory functions in respect of measures which are genuinely necessitated by the COVID-19 outbreak and in the interests of Hong Kong consumers and society," said the agency, whose staffers have been working remotely since its offices shuttered March 23.
The statement provided some guidance on the kinds of conduct that will generally be considered permissible: including joint buying between companies who don't possess "market power in the relevant downstream markets," along with joint production agreements to make goods that individual parties couldn't produce on their own.
Joint ventures selling, distributing or marketing particular products will also be generally accepted, according to the guidance, provided those ventures are "objectively necessary for a party to enter a market it could not have entered on its own or with a smaller number of parties than those actually involved in the collaboration."
Additionally, the commission said information sharing is permitted on things like best practices, although it remains prohibited when sharing competitively sensitive details.
The commission further encouraged companies to reach out if they're interested in "temporary cooperative measures which are genuinely necessitated by the COVID-19 outbreak and in the interests of Hong Kong consumers and society." Companies, it said, may want to reach out under its "informal engagement process" before taking such actions in order to avoid potential enforcement.
"The commission will aim to handle such engagement on an expedited basis. In relation to proposed measures, it will endeavor to provide initial views on an informal basis within five working days of receiving all necessary information on the measures, subject to exceptional resource constraints," the agency said.
Like many of its international peers, the agency's statement strikes a balance between trying to facilitate necessary conduct and warning against any attempt to take advantage of an outbreak that has killed more than 21,000 people globally, according to the World Health Organization, which on Friday also reported over 465,000 confirmed cases.
"As the ordinance continues to apply in full, however, the commission will remain vigilant to protect consumers from anti-competitive conduct by businesses seeking to take advantage of the outbreak or using the outbreak to justify improper collusion or other anti-competitive conduct. Such conduct will be subject to the full force of the law," the agency said.
--Editing by Bruce Goldman.
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