Relevant legislation and statutory standards

The principal legislation dealing with the competition aspects of a merger is the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970 (‘the Ordinance’). The stated objective of the Ordinance is to provide for measures against undue concentration of economic power, growth of unreasonable monopoly power and unreasonably restrictive trade practices, and its scope is basically twofold: to control and, where appropriate, prevent monopolistic situations and restrictive trade practices and to provide a structure for monitoring potentially monopolistic situations.

The former objective is set out in Section 3 of the Ordinance, which simply states that there ‘shall be no undue concentration of economic power, unreasonable monopoly power or unreasonably restrictive trade practices’ and powers to enforce this prohibition have been given to the Monopoly Control Authority (‘the Authority’) constituted under Section 8 of the Ordinance.

The relevant prohibitions in the context of mergers are ‘undue concentration of economic power’ and ‘unreasonable monopoly power’. These terms are not deined, but the Ordinance deems certain situations to constitute such power and consequently to fall within the prohibitions to which the terms relate.

Undue concentration of economic power is deemed to have been ‘brought about, maintained or continued’ if: