Skip to main content

  • AddRemove
  • Build a Report 
Legal Update

What Do Employers Need to Know about Competition Law? (Episode 9 – group boycotts)

3 December 2014
Mayer Brown JSM Legal Update

In the previous episode of this series, Mayer Brown JSM discussed how a non-solicitation agreement between competitors differs from the typical restrictive covenants in an employment contract. Colin, now feeling quite learned, is ready to learn more…

Colin: You mentioned that “group boycotts” could pose problems too? So, what are “group boycotts”?

Mayer Brown JSM: There are various forms of “group boycotts”. A boycott may be aimed at preventing a new potential competitor from entering the market. It may also take the form of eliminating an existing competitor.

In an employment context, group boycotts may take the form of a group of competitors ganging up to poach a competitor or a potential competitor’s key employees in order to cripple that competitor’s ability to compete. Such conduct may violate competition law.

Colin: I heard people talking about “cartel agreement” when they discussed competition law issues. What is a “cartel agreement”?

Mayer Brown JSM: A “cartel agreement” is basically an agreement between competitors which has the objective of reducing or eliminating competition among cartel members. For example, if a boycott is intended to facilitate a cartel agreement to eliminate a competitor, the boycott will be considered an essential part of the cartel. A “cartel agreement” will be a clear and serious violation of the Competition Ordinance.

Colin: So this only applies where the competitors gang up and target an outside member?

Mayer Brown JSM: No. It would also be anti-competitive if a group takes action against one of its own members. It is not uncommon for cartels to take action against a “rogue” member as “punishment” for adopting a different course of conduct than what has been agreed amongst the cartel members, which then undermines the cartel arrangement.

Colin: Okay, I get it.


  • Hannah C. L. Ha
    T +852 2843 4378
  • John M. Hickin
    T +852 2843 2576

The Build a Report feature requires the use of cookies to function properly.  Cookies are small text files that are placed on your computer by websites that you visit. They are widely used in order to make websites work, or work more efficiently.  If you do not accept cookies, this function will not work.  For more information please see our Privacy Policy

You have no pages selected. Please select pages to email then resubmit.