Two-tier plan for competition law

PUBLISHED : Saturday, 11 February, 2012, 12:00am
UPDATED : Saturday, 11 February, 2012, 12:00am


Hong Kong will set up a two-tier regime to oversee most of its 580 statutory bodies under the forthcoming competition law, with about 10 of them to be regulated like commercial companies by a new commission, said a source familiar with the plan.

Entities deemed commercial because they compete directly with private industry would face tougher restrictions on engaging in anti-competitive behaviour under the new law. The remaining 570 entities would be monitored by an existing advisory body.

The government is expected to brief the Legislative Council's bills committee about the list of statutory bodies covered on Tuesday.

Ocean Park and the Federation of Hong Kong Industries are two of the statutory bodies most likely to be counted as commercial and supervised by the future competition commission. The remainder would be overseen by the Competition Policy Advisory Group (Compag) - a panel led by the financial secretary.

Under the new criteria, a statutory body would be regulated as a commercial enterprise if it engages in substantial economic activities and direct market competition, but does not provide an essential public service and lacks a compelling policy reason for exemption.

The industries federation was not exempted even though it was created for a similar purpose as the trade development council because it had evolved over the years to function similarly to the city's private chambers of commerce, the source said.

Ocean Park was not eligible for exemption because it was not seen as providing an essential public service.

Exempted bodies would not be regulated by the commission and the tribunal, but the non-statutory Compag, which would be charged with ensuring they do not conduct anti-competitive behaviour.

'But that does not mean these bodies can conduct anti-competitive behaviour because the Compag will regulate them,' said the source. 'They are also bounded by the corresponding statutes.'

While the Compag can act on complaints or initiate investigations on its own, a 2006 report noted that the small number of cases it had substantiated was a consequence of the group's lack of power to collect information from accused entities.

The source said the government believed the statutorily regulated bodies would be more co-operative with the group's investigations.


Years that will have passed between the Consumer Council first calling for a competition law and the HK government introducing one