Watchdog sets sights on trade price-fixing

Association deals not allowed regardless of how long practice has been in place, says official

PUBLISHED : Saturday, 24 May, 2014, 3:00am
UPDATED : Saturday, 24 May, 2014, 3:00am

Price-fixing by trade associations is unacceptable and could be an early focus of Hong Kong's new competition law, a senior member of the watchdog team said yesterday.

Senior executive director Rose Webb, who joined the Competition Commission four weeks ago, did not divulge which types of businesses it would investigate when the competition law comes into full effect, but said pricefixing by trade associations was one of the first targets when a similar law was introduced in Australia.

Her comments followed reports of trade unions of gold retailers and chicken sellers setting "recommended prices" among members. Gold traders agreed on a daily price to apply in all retail outlets, the reports said.

Webb said, according to her experience in the Australian Competition and Consumer Commission, it was extremely difficult for a trade association to get an exemption for fixing prices of consumer goods.

She said that while the commission's priority was to explain the rules to correct lawbreaking practices - before the law comes into full effect - prosecutions would be the next step.

"People have misconceptions about what they can and cannot do," she said.

The commission's deputy secretary general Sam Hui Chark-shum said that trade associations exchanging product prices was not allowed regardless of how long it might have been taking place.

However, they would be allowed greater flexibility to exchange general market information and historical data, he said.

"It doesn't matter if a trade practice has been followed for 50 or 100 years. If it's against the law, businesses should stop the practice," he said.

The commission urged any traders who were asked to enter into price-fixing agreements to report the case to the watchdog. The initial whistleblower would not be fined, he said.

Sebastien Ervard, a lawyer specialising in competition law, said he would advise clients to refuse to enter into price agreements and to leave trade meetings if sensitive matters concerning prices or supply were raised.

The commission is drafting guidelines for the competition law, which is expected to come into force early next year.