Petrol prices in Hong Kong will be first big test for new competition law

PUBLISHED : Friday, 07 August, 2015, 1:36am
UPDATED : Friday, 07 August, 2015, 1:36am

It says something about how much the freedom of doing business in this city is cherished, and the anathema of regulation, that a contentious competition law was 15 years in the making, plus three more years before it comes into effect on December 14. It is a reform for which both businesses and the new competition watchdog are now preparing in earnest. The Competition Commission has taken a landmark step with the issue of guidelines on how it plans to investigate anti-competitive conduct, which will help businesses understand what practices may breach the new law. Accordingly, the commission has urged businesses to review their practices and make any necessary changes to ensure compliance with the law.

Hong Kong likes to consider itself as having the world's best business environment, but it is not uncommon for questionable practices to put smaller players and consumers at a disadvantage. When a draft of the guidelines was issued last year it prompted concerns in the business sector about some examples of anti-competitive conduct that are commonplace in various industries here but considered unacceptable elsewhere. Education of companies in their responsibilities under the ordinance is therefore paramount.

One of the most keenly awaited investigations by the commission will be into petrol prices, after released data showing Hong Kong had the world's most expensive petrol at just under US$2 a litre. While the Hong Kong Automobile Association reflected motorists' outrage, a spokeswoman for Shell Hong Kong said the price was affected by a number of local factors, and in any case discounts and promotions lowered it beneath the retail price. Though the commission cannot investigate until December, a spokeswoman noted consumer concerns and said it was already studying competition issues. Motorists may be inured to pain in the pocket at the petrol pump, but they are entitled to clarification of competition issues, which would do no harm to the competition watchdog's credibility.