Regulating Monopolistic Conduct of Conglomerates under Hong Kong Competition Law: Current Framework and Institutional Reform

This study examines the regulatory challenges posed by the dominant position of conglomerates, particularly those in the real estate sector, within Hong Kong's economy following the full implementation of the Competition Ordinance (CO) in December 2015. While the CO provides a legal foundation for curbing anti-competitive practices, its effectiveness in addressing the conduct of well-resourced, cross-sector conglomerates remains limited. The paper begins by analyzing the enforcement tools available to the Hong Kong Competition Commission (HKCC), including investigative powers, promotional functions, and advisory roles, and points out the lack of targeted compliance outreach toward large conglomerates. It then identifies several critical gaps in the existing competition regime and proposes three key reforms. First, the "second conduct rule" under Section 21 should be amended to explicitly prohibit exploitative abuses—not just exclusionary ones—to prevent interpretive ambiguity in enforcement. Second, a separate and more deterrent penalty standard should be established for conglomerates, given their greater capacity to cause market harm compared to small and medium-sized enterprises. Third, the merger rule, currently confined to the telecommunications sector, must be extended to all industries susceptible to anti-competitive consolidation, thereby preventing conglomerates from leveraging cross-sector mergers to entrench market power. The paper concludes that only through a combination of proactive enforcement, tailored compliance initiatives, and legislative refinement can Hong Kong's competition framework effectively restrain conglomerate dominance and safeguard fair market competition.