Competition law critics betray their entrenched interests
Hong Kong is among the very few developed economies in the world without a competition law. Judging by the views expressed at a debate on the subject yesterday, it is unlikely to get one in the foreseeable future. That is a shame.
The arguments in favour of a competition law are straightforward. By ensuring a level playing field for businesses, a competition law would lead to more choices and lower prices for consumers.
The arguments against are more hazy, but they are worth examining because they speak volumes about the attitudes of Hong Kong's entrenched business interests.
Yesterday's debate threw up three basic objections: firstly, that a competition law would create more bureaucracy and trigger more lawsuits; secondly, that it might not work; thirdly, that it might work rather too well, interfering with big businesses' ability to make large profits.
The first objection was raised by Andrew Work, the executive director of the Lion Rock Institute, a libertarian think-tank dedicated to defending Hong Kong's economy against 'creeping socialism'. Mr Work insisted competition laws did more harm than good by increasing government meddling, triggering malicious lawsuits from underperforming competitors and raising costs. The only people who would benefit, he said, were bureaucrats and attorneys.
While it is unfortunately true that laws breed lawyers, that is hardly a valid argument against legislation. And while excessive red tape is a great evil, officials are often needed to protect the interests of the ordinary citizen. The Food and Environmental Hygiene Department, for example, is undoubtedly bureaucratic, but that does not mean we should accept lower standards of hygiene.
The second argument against a competition law - that it might not work - was advanced chiefly by Richard Wong, the professor of economics at the University of Hong Kong. He said a law could punish the innocent and fail to punish the guilty. The cure, he said, could be worse than the disease. 'Just because in theory you can remedy it doesn't mean in practice that you will remedy it,' he warned.
This counsel is so defeatist it is hardly credible. It is tantamount to saying there should be no law against murder because a law would not prevent killings. Certainly, a poorly drafted competition law could be harmful, but since almost every significant economy now has legislation, it should not be too difficult for Hong Kong to cherry-pick from the best examples.
The third objection was raised by Executive Council member and Liberal Party deputy chairman Selina Chow Liang Shuk-yee. Ms Chow, who claims her proudest professional achievement is 'to have been the creator of Miss Hong Kong', warned a legally constituted competition authority would be able to investigate complaints and take action against offenders. 'To give anybody such powers is frightening,' she said.
It may be frightening to the cartels and monopolies and to those business people guilty of price fixing, bid rigging, proprietary bundling, predatory pricing and a host of other dodgy business practices. But that is rather the point.