No more delays to competition law

Hong Kong likes to consider itself as having the world's best business environment - a free flow of information, an efficient government, few institutional barriers, and an affordable manpower supply. While the city is largely considered business-friendly, fair competition is another matter. Questionable practices that put small players and consumers at a disadvantage are not uncommon. It was not until two years ago that legislation against anti-competitive behaviour was put in place. Unfortunately, it will not be ready for implementation until next year.

In another preparatory step for enforcement, the Competition Commission last week issued 100 pages of draft guidelines, detailing what may or may not constitute breaches under the ordinance. It is good that the watchdog is trying to make sense of what the law means to individual businesses, and addresses their concerns before it comes into effect.

The business sector is understandably worried. Some examples of conduct raised in the guidelines are commonplace across various industries. For instance, it has been a long-standing practice for a supplier or distributor to set a fixed or minimum price for retailers to follow when selling a product. The commission considers this as undermining competition. Those who cannot justify such an arrangement on efficiency grounds will be breaking the law, it says.

The initial response to the guidelines suggest the business community may still not be ready for the change. But that is why a law is needed, to rectify practices that have been taken for granted here but are considered unacceptable elsewhere. True, there are concerns to address, but they should not become excuses for further delays. The watchdog should step up education and help companies understand their responsibilities arising from the ordinance.

A good business environment provides a genuinely level playing field for all. It is to be hoped that the new law will turn Hong Kong into a better place for doing business.