Hong Kong could lose out to regional rivals, shipping firms warn as antitrust watchdog bars them from sharing sensitive information

Hong Kong could lose out to regional rivals due to the city’s antitrust watchdog refusing to allow shipping liners to exchange sensitive market information, industry players have warned.

The Competition Commission on Tuesday refused to grant block exemption to the decades-old practice among Hong Kong shipping liners due to “competitive concerns”, which means they are barred from sharing any market information related to trade flows, supply and demand forecasts and pricing regarding particular trade routes.

Disappointed, shipping chambers warned that the ruling would put Hong Kong at a disadvantage in regional competition as authorities such as those in Singapore and mainland China are adopting the practice to stabilise market prices.

However, the commission has given the green light to firms to jointly operate vessel services and exchange vessel spaces – if their market share does not exceed 40 per cent – citing the benefits of improving economic efficiencies.

“The sharing of competitively sensitive pricing information between competitors and the agreement of recommending pricing guidelines may give rise to competition concerns,” the commission said in a statement explaining its ruling, adding that carriers are more likely to raise prices high above the market level under such agreements.

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“While we are glad to see [the commission] recognise the value of operational agreements to Hong Kong’s economy, we are indeed disappointed that commercial agreements were not given the same level of recognition and included in the ruling,” said Roberto Giannetta, secretary general of the Hong Kong Liner Shipping Association. The business body, whose 16 corporate members own 90 per cent of the city’s containerised liner market, filed the application for exemption in 2015, when the city’s Competition Ordinance came into effect.