7 July 2009 Mr Gregory So, JP Under Secretary for Commerce and Economic Development Commerce and Economic Development Bureau 2/F, Murray Building Garden Road Hong Kong Dear Greg,
Competition Law
Thank you and your team for taking time out of your busy schedule to exchange views with us on developing a competition law for Hong Kong. The following are some areas of concern to Chamber members. Statutory Examples and Guidelines We understand that, in response to businesses' need for legal certainty, the Government is considering including in the Law a non-exhaustive list of examples of the type of conduct which would be prohibited. This arrangement is welcomed as it should give the future Commission and the courts a clear steer as to the legislative intention, and assist businesses with their compliance efforts. We also understand there will be a set of guidelines issued by the Competition Commission. Our members feel that in order to provide certainty, the guidelines should be as detailed as possible. We welcome the government proposal that consultation on the drafting of the guidelines would be provided for in the legislation. We urge that stakeholders, including the business community, have the opportunity to be consulted when drawing up the guidelines. A clear set of guidelines will help market participants to assess the effects of their conduct on the market and thus their compliance with the law. Implementation We maintain our long held position that implementation of the law should be incremental, and focusing on the more obvious anti-competitive conduct in the initial stages. Appropriate transitional (i.e. ‘grace') periods should be incorporated for the Commission to raise awareness and understanding of the new Law, to give businesses sufficient time to make any necessary adjustments, and to allow them to consult the Commission for more specific advance guidance and clearances where appropriate. The possibility of obtaining specific advance guidance and clearances after the Law takes effect should also be provided for in the Law. We strongly feel that a carefully considered, gradual approach in the legislation will ensure a better chance of success. Safe Harbour There should be clarity in providing indications as to the level of safe harbour provisions. Most importantly, there should not be any implication that “big is bad”. In this connection, the definition of markets for each industry is important as they may extend beyond the boundary of Hong Kong. Exemptions We are of the view that the principles for exemptions and exclusions should apply across the board. Exemptions should only be extended to government services where there is no commercial activity. The law should apply to all statutory bodies unless exemptions are provided. Finally, we believe there should also be clear indications as to the position of companies that are subject to sector-specific regulation, for example companies in the telecommunication, broadcasting and energy sectors and other sectors which operate under special regulatory schemes between the government and the companies/institutions concerned such as power companies, oil companies, airlines, railways, ports, banks and financial institutions. It is important to clearly state the provisions which would be included in the legislation to resolve conflicts between the competition law and these other regulatory systems. I hope the above will be of help in drafting a competition law for Hong Kong, and would appreciate it if we could have your written views on these issues. Sincerely, Alex Fong CEO c.c. Ms Linda Lai, Deputy Secretary for Commerce & Economic Development (Commerce & Industry) 1
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