Call to scrutinise statutory bodies before passing competition bill

The government should scrutinise statutory bodies before exempting them from a bill to promote competition, the Law Society says. Among the city's 500-plus statutory bodies are universities, Ocean Park, the Airport Authority, Trade Development Council and the Science and Technology Parks Corporation.

The society's proposal contrasts with the government's plan to implement a blanket exemption for statutory bodies, then submit to the Legislative Council a list of those engaging in economic activities to be subject to the conduct rules annexed to the bill. Legco will then decide if an exemption is warranted.

The proposed change is among more than 100 concerns the Law Society voiced about the proposed legislation, intended to provide a level playing field for companies.

Society president Huen Wong said the opt-out approach would ensure fairness. 'For a statutory body to be excluded from the bill, it has to face the scrutiny of Legco. As such, competitors are allowed to state their views,' Wong said.

He also highlighted the need for key terms to be better defined and for the scope of exemptions and prohibited actions to be more precise. The Law Society wants a definition for 'competition', which is lacking in the current draft bill.

It also demands clarification on the definition of 'undertaking', saying the current widely drafted meaning would cover all businesses.

The proposed bill would tackle two major types of anti-competitive behaviour - price-fixing and market-sharing, and abuses of market power such as predatory actions.

The government said such details would be drawn up by a competition commission and a tribunal set under the law, but Wong said that could give too much leeway to the bodies. 'From a legal-technical point of view, it may not be the best to leave all these details to ... the commission.'

Undersecretary for commerce and economic development Greg So Kam-leung said the opt-in approach was sufficient since many statutory bodies acted in a consulting capacity and did not take part in economic activities. So said flexibility was needed in defining key terms since they had to reflect the actual market situation.

'We envisage there would be numerous guidelines set at the early stage of the implementation of the bill,' he said. 'The commission would consult the stakeholders before amending the terms.'

A Legco bills committee will hold 37 meetings to look at the terms of the bill, which is expected to be passed in May 2012.