Can Hong Kong make the most of its new competition law?
Greg So says the government has been at pains to ensure that the new legislation meets international standards and will not adversely affect the normal functioning of markets
The Competition Ordinance, after more than three years of preparation since enactment, is set for full commencement on December 14. This is a major milestone in the development of competition policy in Hong Kong, and brings us on a par with the international best practice of safeguarding competition in the markets.
We, however, have not lost sight of the challenges ahead. In recent years, businesses in Hong Kong have become more familiar with the key concepts of the Competition Ordinance and started adjusting their trade practices for better compliance. However, there are still lingering concerns that the well-intentioned law may bring untoward impact to the normal functioning of the markets.
Competition law is a new thing in Hong Kong. It is, of course, not novel in the international arena. We have benefited from the ample experience of other jurisdictions in instituting a cross-sector competition regulatory regime.
For example, the two conduct rules which are applicable to all sectors, namely, the rule that prohibits anti-competitive agreements and concerted behaviour, and the rule that prevents abusive use of substantial market power, are modelled on the competition laws of the UK and Singapore, which in turn make reference to key concepts from European Union competition articles. This ensures that when our law is put to use, it will not be interpreted in isolation, but anchored in the wealth of case laws overseas. Businesses can also make reference to established precedents when assessing their competition risks.
Encouraging general understanding of and compliance with the ordinance is important for effective implementation in the long run. That is why we built in a long transition phase and provide a wide range of enforcement tools to the Competition Commission other than litigation, which can assist and encourage compliance and self correction. The commission has recruited experts with a variety of overseas experience and made sure they have sufficient time to understand Hong Kong.
With provisions measuring up to international standards embedded into the ordinance and the competent authorities at our disposal, I am convinced we are on solid footing to start climbing the learning curve on full commencement of the law. There may still be concerns, doubts and teething adjustment issues in the initial days. This is only natural.
With a proactive attitude, businesses and other sectors of the community will soon appreciate that the law is there to serve them. The next challenge is to make good use of this new piece of law to keep our markets vibrant and open.
Greg So Kam-leung is secretary for commerce and economic development