The Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012 (the “Amendment Ordinance”) was passed by the Legislative Council on 17 July 2012 and it has come into effect on 19 July 2013. The Amendment Ordinance extends the coverage of the Trade Descriptions Ordinance (Cap. 362) (the “TDO”) so as to prohibit specified unfair trade practices deployed by traders against consumers, including false trade descriptions of services, misleading omissions, aggressive commercial practices, bait advertising, bait-and-switch and wrongly accepting payment. Collectively known as the ‘fair trading sections’, sections 4, 5, 7, 7A, 13E, 13F, 13G, 13H and 13I of the TDO specify the relevant criminal offences. The Amendment Ordinance also introduces a civil compliance-based mechanism to encourage compliance by traders and to stop suspected non-compliant practices, under which the law enforcement agencies may, as an alternative to criminal prosecution, accept an undertaking from a trader whom the enforcement agencies believe has engaged in a prohibited unfair trade practice to stop that practice.

The Customs and Excise Department (“C&ED”) is the principal agency responsible for enforcing the TDO. Concurrent jurisdiction is conferred on the Communications Authority (“CA”), with the Office of the Communications Authority (“OFCA”) as its executive arm, to enforce the fair trading sections in relation to the commercial practices of licensees under the Telecommunications Ordinance (Cap. 106) and the Broadcasting Ordinance (Cap. 562) that are directly connected with the provision of a telecommunications service or broadcasting service under the two Ordinances. To enforce the TDO effectively and to ensure that every case is taken up by the appropriate enforcement agency, the Commissioner of Customs and Excise (the “Commissioner) and the CA have entered into a Memorandum of Understanding for the purpose of coordinating the performance of their functions.

Enforcement Guidelines issued under the Amendment Ordinance

Pursuant to the new sections 16BA and 16H of the TDO as amended by the Amendment Ordinance, the Commissioner and the CA as the enforcement agencies published the draft Enforcement Guidelines for the fair trading sections in the TDO for public consultation from 7 December 2012 to 17 March 2013.

In response to the public consultation, a total of 27 submissions from various parties were received. In light of the views and comments gathered from the consultation, the enforcement agencies have revised the draft Enforcement Guidelines, and published the Public Consultation Report and the final version of the Enforcement Guidelines on 15 July 2013 to state the manner in which they will exercise their enforcement powers and provide guidance on the operation of the new legislative provisions.