NewsHong Kong

Commission sets its sights on the price fixers

Price cartels are a major concern for the Competition Commission. But its first job is to educate the public and companies on a new law

PUBLISHED : Tuesday, 20 May, 2014, 4:04am
UPDATED : Tuesday, 20 May, 2014, 4:04am

Price cartels will be among the main targets of the commission responsible for enforcing Hong Kong's new competition law when the legislation takes full effect in the first half of next year.

But Competition Commission chairwoman Anna Wu Hung-yuk is not yet ready to point the finger at industries where price fixing occurs as she wants to avoid bias in future cases. Before that, the commission has work to do, including informing the public, companies and trade groups about the law in a process to start on Monday, and consulting on draft guidelines to be issued in September.

"During the consultation, I will avoid giving answers to any example as those cases will come back to us after our commission is in full operation next year," Wu said yesterday. "We want to avoid any prejudice or bias in our handling of these cases in future."

The guidelines on interpretation, investigation procedures and the handling of complaints - adoption of which are a precondition for full operation of the Competition Ordinance passed in 2012 - are due to be submitted to the Legislative Council by the end of the year.

Both the ordinance and the commission will be in full operation in the first half of next year.

"Some people in business are worried about possible increases in the cost of doing business after the ordinance is implemented," Wu said. "My answer to them is that the law will create a more competitive business environment and eventually reduce their operating costs."

The ordinance, which aims to provide a level playing field for doing business, tackles two types of anti-competitive behaviour: price fixing and market sharing; and abuse of market power.

Wu said price cartels were not rare in Hong Kong and would be among the main issues the commission would look into.

Among other things, the guidelines will spell out the market share below which a firm would be unable to prevent competition.

In June 2012, Secretary for Commerce and Economic Development Greg So Kam-leung proposed a market threshold of 25 per cent, with which Wu agreed. She said the commission would see if there was "justification" for adjusting that figure.

She said the commission was in the process of recruiting a chief executive from outside Hong Kong and she hoped the person could start by the end of the year.

The commission, set up in May last year, is responsible for investigating complaints and bringing cases to the new Competition Tribunal.




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