HK Competition Policy Review Committee Publishes Report

by Mary Swire, for LawAndTax-News.com, Hong Kong

06 July 2006

In a report published on Tuesday, Hong Kong's Competition Policy Review Committee recommended that new legislation be introduced to guard against anti-competitive conduct that would have an adverse effect on economic efficiency and free trade in Hong Kong.

The report recommended that rather than target specific areas of the economy, the legislation should apply to all sectors. Provisions should be included that allow the Government to grant exemptions to the application of the law in defined circumstances on public policy or economic grounds.

It went on to suggest that the regulatory authority should have the discretion to disregard inappropriate complaints, to guard against the new law being used to stifle legitimate competitive business activities. The new law will not target market structures, nor seek to regulate "natural" monopolies or mergers and acquisitions.

The new legislation should cover anti-competitive conduct, like price-fixing, bid-rigging, market allocation, sales and production quotas, joint boycotts, unfair or discriminatory standards, and abuse of a dominant market position, the Committee argued.

The report further recommended that a regulatory authority, to be known as the Competition Commission, should be established, comprising a governing board underpinned by an executive arm featuring experts in the field.

The Commission should have an advocacy role, and should be tasked with keeping the scope and application of the new law under review. It should have sufficient powers to allow it to investigate suspected anti-competitive conduct.

The Government should consider establishing a Competition Tribunal to hear cases brought by the Commission and to hand down sanctions, and civil penalties should apply in cases where anticompetitive conduct is found, it was suggested.

The report added that the Government should also garner public views on the new competition law and regulatory structure before their introduction, and plan and implement resources for the structure's establishment.

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