18 August 2009 Our Ref: CC102 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
I refer to Linda Lai's letter of 27 July responding to our views on the proposed competition law. I have shown the comments to our expert group members and they have asked me to forward their further concerns to you. Statutory Examples and Guidelines We appreciate your confirmation that the list of statutory examples and detailed Commission guidelines referred to in my letter of 7 July are included in the Government's proposals. We also welcome your confirmation that the Government will, in addition, table draft guidelines when the Bill is presented to Legco. We look forward to being able to contribute our comments to the draft guidelines, hopefully before they are made public. Implementation We are pleased to note that the Government agrees with us that a transitional period is necessary to allow time for the community to get themselves familiarized with the new law and for businesses to have sufficient time to make any necessary adjustments. However, there is no indication on the likely period for the transitional period. We believe a two year period might be necessary for a law so complicated and new to Hong Kong, in particular given the current absence in Hong Kong of any significant body of experts in Competition Law. To provide more certainty to businesses, your confirmation that there will be a facility for specific advance guidance and clearances under the new regime is much appreciated. Safe harbour We appreciate the Government's intention that issues of market definition and safe harbour arrangements will be dealt with in the Guidelines and that it will be made clear to the public that the main objective of the competition law is to combat anti-competitive conduct instead of targeting market structures. Thank you for letting us know your current thinking of using 20% market share as a safe harbour guideline. The purpose of safe harbour is to create more certainty to the business community on what to expect. We would appreciate it if you can share with us how the 20% level was arrived at? Presumably, the Commission will be the responsible organisation from whom businesses can seek clarifications on points relating to safe harbour. Exemptions We would like to reiterate our concern that there should be no across the board exemptions for statutory bodies. Exemptions should only be extended to government services where there is no commercial activity. I would like to draw your attention that there are outcries by the community from time to time that a number of statutory bodies are in competition with the private sector. These would include, by way of illustration, bodies like the Hong Kong Mortgage Corp Ltd, Hong Kong Trade Development Council, Vocational Training Council, Productivity Council, Hong Kong Airport Authority, trading funds like that in EMSD, Housing Authority, Urban Renewal Authority, and many others. Sincerely, Alex Fong CEO c.c. Ms Linda Lai, Deputy Secretary for Commerce & Economic Development (Commerce & Industry)1
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