If two restaurants across the street from each other both charged HK$2 extra for iced tea, would that breach the upcoming competition law?
This scenario has been used by lobby groups and opponents of the bill as an example of the draft law's 'vagueness'.
In a government paper released to the legislature yesterday, officials tried to address the issue.
Their answer: it depends.
If a businessman raises the prices of ice tea continually by significant amounts while still maintaining profits, a market monopoly and therefore abuse may exist. This is because customers cannot find substitutes and ice tea amounts to the only 'market'. This may prompt an investigation of an anti-competitive practice.
However, if the hypothetical businessman can no longer maintain profits by raising prices, but customers start switching to alternative drinks, there is no abuse.