Diluted monopoly bill under attack

PUBLISHED : Wednesday, 25 April, 2012, 12:00am
UPDATED : Wednesday, 25 April, 2012, 12:00am


Pan-democrats would oppose a government proposal to exclude more companies from the competition bill and would seek to bring statutory bodies under the control of the law, a legislator said yesterday.

The proposal, unveiled by the Commerce and Economic Development Bureau last month, raised the bar for subjecting companies to the anti-competition law from annual turnover of HK$11 million to HK$40 million.

This means 95 per cent of small- and medium-sized businesses would be exempt.

Civic Party lawmaker Ronny Tong Ka-wah (pictured) said this exceeded the need to protect SMEs from facing non-serious claims.

'As a form of protection, the [turnover] thresholds are set too high and reduce the effect of the bill,' Tong said. 'I will also raise an amendment to abolish the block exemption for statutory bodies, as no one should be placed above the rule of law.'

He said the 20-member pan-democratic camp in the Legislative Council agreed to his proposal at a meeting last Friday.

The pan-democrats are upset that just six of 575 statutory bodies are to be covered by the law. Controversial exemptions include the Trade Development Council and Urban Renewal Authority, which the bureau proposes to be governed by the Competition Policy Advisory Group.

The bureau's changes mark the second round of government concessions to the long-awaited law, which aims to curb anti-competitive behaviour and provide a level playing field for companies.

The changes also raise a second threshold - when more than one company is involved their combined turnover would have to be HK$200 million, up from HK$100 million. There are no exemptions for serious offences.

The pan-democrats object to lifting the two key thresholds. 'An annual turnover of HK$40 million is sufficient for a company to establish substantial market power in a new market,' Tong said. 'The amount should not be so high.'

In the first round of changes to the draft bill in October the government made six concessions to the business lobby.

They included introducing the two market thresholds and taking away the right of individuals and companies to lodge complaints of anti-competitive behaviour directly with a proposed competition tribunal.

The Legco bills committee is expected to discuss the draft legislation for the last time on May 8 before it is tabled to the full council on May 30.

At a committee meeting yesterday, lawmakers were concerned whether the law could control market abuse, such as alleged price collusion among oil companies and The Link Reit's overwhelming control of eight out of nine malls in Tin Shui Wai.

Deputy Secretary for Commerce and Economic Development Linda Lai Wai-ming said that the crux of the law was to empower the future competition commission to investigate collusion.