Hong Kong a step closer to competition law

October 09, 2014 19:35
Hong Kong is stepping up a competition law to strengthen its regime of consumer protection. Photo: Internet

Hong Kong moved a step closer to a competition law Thursday with the release of draft guidelines ahead of a legislative debate on the proposed measure.

The guidelines, called the First Conduct Rule, set the conditions under which companies will be liable for anti-competitive behavior.

It includes sharing markets, restricting output, fixing bids or agreeing not to compete on price.

The proposed legislation is aimed at strengthening consumer protection by prohibiting market cartels or collusion, public broadcaster RTHK reported Thursday.

Car dealers, for instance, will be prohibited from agreeing on discounts or offering confusing insurance options to customers.

They will be barred from collectively setting resale prices and exchanging sensitive price information, the report said.

Private language schools will not be allowed to share survey results relating to proposed fee increases.

Where there is no evidence of collusion, the behavior will be considered a “concerted practice”, the commission said.

The rules also prohibit mergers that are likely to substantially lessen competition.

However, there is no requirement to notify the commission regarding any proposed mergers but the commission may use its powers to investigate the proposal and take the necessary action to ensure compliance.

The guidelines also prescribe procedures for handling complaints and investigations.

The commission has the power to compel individuals to provide documents, information and give evidence if necessary, as well as to seek search warrants.

In addition, it can request employees, competitors, customers, distributors or suppliers of the parties under investigation, representatives of relevant trade associations to answer questions.

Those who fail to comply are liable to a fine of up to HK$200,000 (US$25,790) and one-year imprisonment, the report said.

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