Make changes or we'll block bill, says D.A.B.

PUBLISHED : Saturday, 04 June, 2011, 12:00am
UPDATED : Saturday, 04 June, 2011, 12:00am


Hong Kong's largest political party is threatening to block the proposed competition law unless it is substantially changed to meet its demands.

The Democratic Alliance for the Betterment and Progress of Hong Kong wants to exempt smaller firms from being regulated, confine all lawsuits under the proposed law so they are initiated only by a future competition commission, and considerably expand the number of commission members.

Under the current draft, individuals and companies affected by anti-competitive behaviour could launch lawsuits by themselves.

The DAB had earlier set up a task force to look at the bill and drafted amendment proposals after collecting views from small and medium-sized enterprises. On Wednesday, legislators Tam Yiu-chung, Starry Lee Wai-king, Chan Kam-lam and Wong Ting-kwong and lawyers from the task force met officials from the Commerce and Economic Development Bureau, headed by acting minister Greg So Kam-leung. They submitted a document of about 20 pages detailing the changes the party wants to see in the bill.

'We did not go there just to express grievances,' Wong said. 'We understand the government has its own ideas and concerns and we exchanged views with the relevant officials. If the government doesn't listen to us, then we will oppose the bill.'

On exempting small companies, Wong said: 'In the European Union, businesses with an annual turnover below Euro50 million [HK$563.6 million] are exempted from the competition law. We think local businesses with turnover under a certain amount or with a market share under a certain percentage should likewise be exempted.'

Wong said the government should eliminate provisions for legal action by individuals. This was in response to worries by small and medium-sized enterprises (SMEs) that large corporates might use such 'standalone' actions to lodge vexatious litigations against them.

Without specifying a specific number of members for the commission, the party said the current proposed five-strong membership would not be representative.

Holden Chow Ho-ding, a drafter of the proposed amendments and chairman of the Young DAB, said: 'If there are only five members, people may suspect things are done in a black-box operation.'

'There should be more members, with representatives from the legal sector, small and medium-sized enterprises and other arenas.'

The current bill prohibits mergers and acquisitions which would substantially lessen competition. The party urged the government to expand the scope of this concept to all other market behaviour.

It is rare for the pro-Beijing political party to be in such discord with the government over a bill. In contrast, pan-democrats, in particular the Civic Party, support the bill.

The bureau wants the bill to be passed by the end of July next year, but the government faces an uphill battle with the DAB and lawmakers from the business sector raising strong concerns.

New People's Party chairwoman Regina Ip Lau Suk-yee has even urged the government to shelve the bill. Ip said she was writing a memo to circulate among fellow legislators, laying out her arguments and lobbying them to back withdrawal of the bill. 'The bill is too sweeping. A lot of SMEs will be harmed,' she said. 'The compliance costs for enterprises will be very heavy ... the government hasn't done an impact assessment for the bill.'

Noting that the Democratic Party and Civic Party supported the competition law, she said she did not know at this stage how many lawmakers would agree with her that the bill should be withdrawn. But she believed the bill would be substantially watered down if the government decided to go ahead.