Call for competition law to spell out details on statutory bodies

PUBLISHED : Wednesday, 25 March, 2009, 12:00am
UPDATED : Wednesday, 25 March, 2009, 12:00am

Competition law experts have largely welcomed possible government plans to give courts enforcement powers and to include certain statutory bodies in the proposed legislation, but have called for more details.

Exempting statutory bodies from legislation against anti-competitive practices is a key public concern since the government provides a number of essential services. In other markets, especially the European Union, many public services, such as electricity and post, are provided by private operators, which are subject to market competition.

The government said it was trying to identify which of the roughly 400 statutory bodies would not be exempt from the competition law.

David Cox, who heads DLA Piper's competition practice in Asia, said he agreed with the principle of subjecting statutory bodies that carried out business activities to the laws.

'A relatively simple way is to apply the law to any government body that sells a product or provides a service that could be provided by a private company,' Mr Cox said.

But Simon Sorockyj, of law firm Pinsent Masons, warned that there were usually ways to exclude government bodies from competition law and that 'the devil is in the detail'.

The law could be supplemented with a list of non-exempt statutory bodies, Mr Cox said.

The experts also played down fears that setting up a competition commission with powers to investigate, adjudicate and impose remedies would concentrate too much authority in one place.

Mr Cox said it would be logical to set a threshold, whereby the commission would enforce cases with a maximum fine of HK$1 million, for example. Criminal penalties, prison terms and higher fines could be handled by the courts.

If necessary, competition experts and economists could sit with the judge in court to advise on criminal cases, he said.