Wrangling over exemption in competition bill

PUBLISHED : Thursday, 20 October, 2011, 12:00am
UPDATED : Thursday, 20 October, 2011, 12:00am


The tug-of-war over the controversial competition bill is locked over the mechanism for excluding smaller businesses from prosecution when they commit 'non-serious' offences against the law.

In a package of six concessions to make the proposed legislation more acceptable to business, the government on Tuesday set a market threshold of HK$100 million to exempt small businesses for minor infringements such as such as restrictions on advertising and collective refusal to supply goods. In such cases companies would not face prosecution if their combined annual turnover did not exceed HK$100 million. But serious misconduct, such as price-fixing and bid-rigging, would not be protected.

Now the battle between the business sector and pan-democrat lawmakers has focused on the level of that threshold. The business sector yesterday said HK$100 million was too low, while pan-democrats, who supported the original competition bill, decried what they called a 'level high enough to allow anti-competitive behaviour'.

Arthur Lee Kam-hung, vice-president of the Hong Kong Young Industrialists Council, said the threshold would deny protection to many companies. 'It is common to see companies in many manufacturing businesses having an annual turnover of over HK$100 million, although profits can be very small for many of them,' Lee said. 'My company, in equipment manufacturing, exceeds that amount by itself - let alone talking about agreements between a few companies.'

But the 23-vote pan-democratic camp said the threshold should be even tighter, to make sure more anti-competitive behaviour would be prosecuted under the law.

'We are considering proposing our own amendments to the bill,' Civic Party lawmaker Ronny Tong Ka-wah said, speaking for the camp after meeting the acting secretary for Commerce and Economic Development, Greg So Kam-leung, yesterday. 'We are disappointed with the large concessions. So should not assume our support as iron votes for the bill.'

Originally, the government was going to let the future Competition Commission set the threshold for small businesses. Smaller business associations have now joined the chorus of chambers of commerce in calling for a higher threshold.

The other changes proposed by the government include dropping the right for private lawsuits against companies, and cutting the proposed maximum penalty.