Competition law finally passed after years of debate

PUBLISHED : Friday, 15 June, 2012, 12:00am
UPDATED : Friday, 15 June, 2012, 12:00am

The Legislative Council narrowly passed Hong Kong's first competition law last night, ending more than a decade of debate over the government's effort to rein in anti-competitive practices.

A bare majority of 31 lawmakers voted in favour of the heavily amended bill, with five abstaining and none voting no. The remaining 24 lawmakers either failed to vote or were absent for the final tally just after 10pm.

'The passage of the competition bill is a major milestone in the development of competition policy in Hong Kong, signifying the determination of the government in maintaining fair and free competition in the market,' Secretary for Commerce and Economic Development Greg So Kam-leung said.

The law will probably not take effect until 2014, after the new Competition Commission and a tribunal to review complaints are set up.

While the voting may be over, discussion over the legislation's effectiveness at preventing bid-rigging, price-fixing and other monopolistic behaviour may be just beginning.

Academics and lawmakers contend the law will usher in a more efficient business environment and help roll back anti-competitive practices, but small businesses that are intended to be the main beneficiaries of the law doubt whether they will ever be able to utilise its protections.

The government has gone through two rounds of concessions, during which it has raised exemption thresholds for small and medium-sized enterprises, to pacify businesspeople. The final bill only passed after 200 government amendments.

Most of the city's 580 statutory bodies will be exempted from the law. Concessions on the size of penalties for larger businesses and the introduction of a turnover threshold to limit prosecutions for smaller businesses have also dampened enthusiasm.

The Hong Kong General Chamber of Commerce said last night it believed the final law was far from desirable. Chairman Chow Chung-kong said the government should continue to amend the law or the city's competitiveness could be undermined.

Small and medium-sized companies continued to express concern that the legal costs of pursuing and defending against complaints would make the process prohibitive.

Albert Chan Wai-yip, of People Power, said the bill was 'full of ills and troubles'. He abstained, as did industrial-sector lawmaker Lam Tai-fai. Lam said he supported the legislation to regulate competition but that the final law contained unclear provisions that would weaken its ability to fight 'the big tiger' of big business.

Democrat Fred Li Wah-ming said passing the bill was a good beginning, despite shortcomings that had weakened its provisions.

Lawmakers spent much of the past week vetting scores of amendments to the legislation. Dozens of changes that sought to bring more statutory bodies under the law were voted down.



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