Competition law can apply to statutory bodies

PUBLISHED : Saturday, 03 December, 2011, 12:00am
UPDATED : Saturday, 03 December, 2011, 12:00am


It is not necessary to leave statutory bodies completely out of a planned competition law, a legal adviser to the Consumer Council says, as partial exemptions may be workable.

The government had more options than simply adding organisations to a list of blanket exemptions, said Thomas Cheng Kin-hon, head of the consumer watchdog's competition policy committee.

The comments from Cheng, who is also a University of Hong Kong law professor, come as the government consults lawmakers on whether some statutory bodies should be exempted from the draft bill. There are 500-plus statutory bodies in the city, including universities, Ocean Park and the Airport Authority.

The US and British governments did not exempt statutory bodies from laws promoting competition, Cheng said. Both private and statutory organisations were governed by the same law, though exemptions applied to services of general economic interest - economic activities identified as important to the community.

Such activities can include postal and transport services, the European Commission says. They are determined by courts on a case-by-case basis.

In France, its La Poste service enjoys a government subsidy but no blanket exemption under the law.

'La Poste is granted competition law exemption for its provision of domestic mailing services,' Cheng said. 'However, it receives no exemption for high-speed postal services.'

General mail, he said, could be a loss-making undertaking that might not survive without government subsidies, whereas the market for services such as high-speed post involved private players.

On this basis, the French competition authority halted a proposed partnership in May between La Poste and a courier company out of concerns that their link-up could hinder competition in the market.

In Hong Kong, some statutory bodies serve several roles. The Trade Development Council, for example, is empowered to promote trade with the city, but it also provides exhibition services. Private exhibition firms oppose exempting the council from the competition bill.

The Consumer Council said it supported a regular review of any exemptions after the law came into effect.