Push to set market share threshold

PUBLISHED : Wednesday, 16 February, 2011, 12:00am
UPDATED : Wednesday, 16 February, 2011, 12:00am

Legislators are pushing the government to set a market share threshold before the competition bill is passed to protect small and medium-sized businesses.

They want this threshold, known as a de minimis approach, to be set as early as possible, contrasting with the government's stance to have it defined by a Competition Commission set up after the bill is passed. The bill aims to provide a level playing field for firms in Hong Kong. It tackles two types of anti-competitive behaviour: practices such as price-fixing and market-sharing; and abuse of market power.

Legal experts said setting the level through subsidiary legislation was feasible. This method of ensuring flexibility in making adjustments to the threshold effectively dismantles the government's rationale of insisting it be set by the commission.

'We will keep listening to lawmakers' views,' Undersecretary of Commerce and Economic Development Greg So Kam-leung, who is on Legco's committee scrutinising the bill, said yesterday.

Under this proposal, businesses with market share lower than the set threshold would be exempt from prosecution. But serious misconduct, such as price-fixing and bid-rigging, would not be protected.

According to the committee's legal adviser, drawing a line before the bill was passed in the form of a resolution, while giving the rights of future amendments to the commission, preserved flexibility.

Pro-business lawmakers said a confirmed threshold could help resolve the concern of small businesses. Economic Synergy industrial lawmaker Andrew Leung Kwan-yuen said: 'Waiting for the competition commission means the threshold will not be known until 2012.'

The bill and it is expected to be tabled for approval by July 2012.