New competition watchdog needs cash, its chairwoman tells lawmakers

Money for investigations and tough sanctions are vital to level playing field, says chairwoman of body tasked with policing competition laws

PUBLISHED : Tuesday, 27 May, 2014, 4:22am
UPDATED : Tuesday, 27 May, 2014, 8:31am

The new competition watchdog will lack the bite to take on big business unless it is given a war chest for the battles ahead, its chairwoman warned lawmakers yesterday.

The Competition Commission will police the Competition Ordinance when it comes into full effect next year, but chairwoman Anna Wu Hung-yuk says taking cases to the new Competition Tribunal will not be cheap.

"If we don't have enough financial resources to initiate court cases, it will be difficult for us to carry out our work," she told the Legislative Council's economic development panel. The commission's budget for this financial year is HK$83.9 million.

The ordinance was passed in 2012 after years of debate and is aimed at providing a level playing field by punishing two types of anti-competitive practice: price fixing and market sharing; and abuse of market power.

Wu said success would also depend on the sanctions imposed by the tribunal, which will have the power to fine companies up to 10 per cent of turnover for three years, order damages and disqualify directors.

"If there are not enough sanctions, of course there is not enough deterrent effect … the administration is aware of this," Wu said, adding that the government had given extra funding and discussions would continue.

Asked what the commission could do if the government - which is exempt from the law along with most of its statutory bodies - behaved in a way contrary to the principles of the law, Wu said the commission's powers were limited.

"Government conduct can only be dealt with by government policies," she said. But, she added: "For problems we can deal with, [the law] covers quite a wide scope. We have the power to summon witnesses, to gather papers, or even to visit somebody's premises to check their computers."

Wu said the commission would depend largely on tip-offs from informers. Informers who prompt an investigation will be immune from prosecution and those who give help later might see their punishments reduced, she added. She promised leniency for smaller businesses which inadvertently breached the law.

Legco must approve the commission's guidelines on interpretation of the law, investigations and handling of complaints before the law takes full effect. They will be submitted later this year.