Chamber urges self-policing competitive code
Trust-busting remains off the governmental agenda in Hong Kong, but competitive practices are being encouraged as good for business at the General Chamber of Commerce.
The business group issued a statement yesterday urging its 4,000 members to refrain from restrictive practices and calling on them to develop, on a sector-by-sector basis, self-regulatory codes of competitive practice and complaint-handling procedures. Eden Woon Yi-teng, the chamber's director, described the proposals as a 'voluntary statement of principles' and argued against the enactment of a competition law designed to guard against monopolies and cartels.
'We consider a self-regulatory approach preferable to a legislative approach,' he said. 'The experience of other countries suggests many administrative problems will be encountered in enforcing a competition law.' In 1997, the Government ruled out the drafting of an all-embracing competition law, as proposed by the Consumer Council. Instead, it chose to set up, under the Financial Secretary, a Competition Policy Advisory Group that has no statutory backing and no investigative power.
The Consumer Council welcomed the General Chamber's proposals yesterday but stood by its long-standing call for the provision of legal remedies.
Ray Cameron, the head of the council's trade-practices division, said that self-regulation had a role to play in combatting corporate collusion by providing information useful in formulating a practicable competition policy.
But it had its limits, he said, pointing to a passage from Adam Smith's The Wealth of Nations.
'People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices,' the founder of classical economics wrote.
Self-regulation presupposes the existence of industry bodies capable of generating codes of practice, and that does not always correspond with the facts on the ground.
Take the problem of consistently high petrol prices, which reached a head this spring when consumers responded by siphoning their business to dealers in smuggled, low-price diesel.
'With the petrol industry, for example, there is no industry association,' Mr Cameron said. 'So competition complaints about the petrol industry wouldn't really be covered by the chamber's approach.' David Dodwell, a co-author of The Hong Kong Advantage, a book that analyses the SAR economy and is critical of cartels here, pointed to another problem with the chamber's proposals: their sector-by-sector approach.
'In a small economy like our own, anti-competitive forces can be diffused beyond sectors,' he said.
For example, nearly all of Hong Kong's large property developers had expanded into telecommunications and had been known to use their power as landlords to keep rival mobile-telephone companies' networks out of their shopping centres.
