For immediate release
Chamber Proposes Key Amendments to Competition Bill
The Hong Kong General Chamber of Commerce (the Chamber, or HKGCC) has called for a number of key amendments to the Competition Bill with a view to allaying the concerns of small-to-medium enterprises and avoiding overreaching in regulation.
HKGCC’s Chairman, Mr Anthony Wu, outlined the proposed amendments at a joint-chambers forum held today. Major SME associations also participated in the discussion.
HKGCC’s key proposed amendments include:
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Adopting the test of “substantially lessen competition” in place of “prevent, restrict, or distort” competition as drafted, so as to ensure that only conduct that substantially affect the market will be regulated. This will help protect SMEs.
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Focusing on prohibiting “hardcore” conduct, namely price fixing, bid rigging and market sharing, which has the effect or likely effect of substantially lessening market competition;
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For all other conduct (“non-hardcore” conduct) – which is difficult to define in advance and might well benefit economic efficiency – removing the automatic prohibition currently contained in the Bill. Instead, such conduct should only be prohibited if and when the Tribunal has examined the specific conduct in question, and determined that its economic benefits do not outweigh the lessening of competition it causes;
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Remove the procedure for stand-alone private actions;
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Substantially lower the penalty cap to 10% of gross revenue generated in Hong Kong by the product or service found to be involved in contravention of the competition law, and limit the application of penalty to one year’s revenue.
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Expressly exclude mergers from the Conduct Rules, and delete the section on merger control.
Mr Wu highlighted that the proposed approach to non-hardcore conduct such as joint purchasing agreements and discount schemes, would be crucial for allaying SME concerns about inadvertently falling foul of the new law by entering into such conduct.
“Adopting this procedure will significantly reduce compliance costs, especially for SMEs, and avoid overreaching in regulation. Businesses may compete as freely as before with the assurance that they would not infringe the law inadvertently and be found having acted illegally because the law lacks clarity. Introducing this procedure will also bring Hong Kong’s competition legislation closer to the approach in major jurisdictions such as the US and Canada,” said Mr Wu.
Mr Wu said introducing the Chamber’s proposed amendments would not entail an overhaul of the Competition Bill, adding that he sincerely hoped that the Government would discuss the proposed amendments with an open mind, so that Hong Kong might enact a competition law that would be appropriate for its unique economic conditions as an open and free economy.
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