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Telecommunications (Competition Provisions) Appeal Board

Appeal No. 31

Hong Kong Telecommunications (HKT) Limited v The Communications Authority

Date of appeal : 14 February 2013
Appellant : Hong Kong Telecommunications (HKT) Limited
Intervener : Apple Asia Limited
Nature of appeal : Against the decision of the Communications Authority (“CA”) not to issue an urgent interim direction to prohibit the alleged anti-competitive SIM-locking of Apple devices including the iPhone 5, the iPad mini and the iPad (4th generation).
Principal grounds for contesting the decision : The Appellant contends that the CA’s conclusion that it had insufficient information to deal with the Appellant’s competition complaint is inconsistent with its predecessor’s findings in the SIM-locking statement that the conduct the Appellant complains of is anti-competitive and with the express prohibition in section 7K(3) of the Telecommunications Ordinance (Cap. 106).
Key relief sought : The Appellant seeks orders that the Appeal Board vary the appeal subject matter by substituting the grant of an interim direction directing Apple Asia Limited to immediately remove the SIM-lock which is presently preventing or has prevented cellular enabled devices including the iPhone 5, iPad mini and/or the iPad (4th generation) detecting and connecting to the Appellant's 4G/LTE network in Hong Kong and to refrain from importing or selling telephones, telephone operating systems or other telecommunications equipment programmed to restrict their use by network; alternatively orders that the appeal subject matter be quashed, and that the CA be directed urgently to issue a direction under section 36B of the Telecommunications Ordinance (Cap. 106) directing Apple Asia Limited to immediately remove the SIM-lock which is presently preventing or has prevented cellular enabled devices including the iPhone 5, the iPad mini and/or the iPad (4th generation) detecting and connecting to the Appellant’s 4G/LTE network in Hong Kong and to refrain from importing or selling telephones, telephone operating systems or other telecommunications equipment programmed to restrict their use by network; and an award of such sum in respect of the costs involved in the appeal as is just and equitable in all the circumstances of the case.
Hearings :
  • The Appeal Board conducted a hearing on 26 April 2013 on the preliminary issue as to whether the Appellant’s appeal is within the jurisdiction of the Appeal Board, and concluded in its Decision dated 4 June 2013 (copy attached) that the Appeal Board had no jurisdiction to hear the Appeal.

  • The Chairman granted leave on 30 July 2013 for the Appellant to state a case to the Court of Appeal.

  • The Court of Appeal heard the Case Stated (no. CACV 190/2013) on 29 November 2013 and handed down judgment on 17 December 2013 (copy attached). The Court of Appeal decided that the Appeal Board has jurisdiction to hear the appeal and remitted the case to the Appeal Board for reconsideration.

  • A hearing was scheduled for 16 January 2014 to reconsider the appeal case. On 10 January 2014, the Appellant sought leave to amend its Notice of Appeal. On 13 January 2014, Apple Asia Limited filed an application to intervene. The Appeal Board heard the application on 16 January 2014 and granted leave for Apple Asia Limited to intervene. The Appeal Board also granted leave for the Appellant to amend its Notice of Appeal in accordance with the terms proposed on 10 January 2014. The Appeal Board's Decision on Application to Intervene dated 24 January 2014 is attached.

  • A hearing on the appeal case was held on 10 March 2014. The Judgment of the Appeal Board dated 17 April 2014 is attached.
Outcome of appeal : The Appeal Board allowed the appeal to the extent that the Appeal Subject Matter (as defined in the Notice of Appeal) truly engaged section 7K of the Telecommunications Ordinance (Cap. 106), but rejected the Appellant's contentions that Apple Asia has imposed a prohibited SIM-lock as that term is currently defined in the current policy statement on SIM-locking and had engaged in anticompetitive practices prohibited by section 7K(3). The Appeal Board refused to issue or to direct the CA to issue any form of interim relief under section 36B of the Telecommunications Ordinance (Cap. 106) directing Apple Asia to remove the restriction preventing the Appellant’s customers from accessing 4G connectivity on the iPhone 5, iPhone 5C or iPhone 5S. The CA was directed to proceed diligently and expeditiously with its enquires into the Appellant’s complaints under section 7K(1) of the Telecommunications Ordinance (Cap. 106) and to arrive at a decision, including a decision regarding whether or not to make any interim or final direction under section 36B of the Telecommunications Ordinance (Cap. 106) by 1 July 2014.