New legislation should be introduced to guard against anti-competitive conduct that would have an adverse effect on economic efficiency and free trade in Hong Kong. This is the view of the Competition Policy Review Committee in its report on Hong Kong's competition policy published today.

It said rather than target specific areas of the economy, the legislation should apply to all sectors. Provisions should be included that allow the Government to grant exemptions to the application of the law in defined circumstances on public policy or economic grounds.

The regulatory authority should have the discretion to disregard inappropriate complaints, to guard against the new law being used to stifle legitimate competitive business activities. The new law will not target market structures, nor seek to regulate "natural" monopolies or mergers and acquisitions.

The new legislation should cover anti-competitive conduct, like price-fixing, bid-rigging, market allocation, sales and production quotas, joint boycotts, unfair or discriminatory standards, and abuse of a dominant market position.

Competition authority

A regulatory authority, to be known as the Competition Commission, should be established, comprising a governing board underpinned by an executive arm featuring experts in the field. The commission should have an advocacy role, and should be tasked with keeping the scope and application of the new law under review. It should have sufficient powers to allow it to investigate suspected anti-competitive conduct.

The Government should consider establishing a Competition Tribunal to hear cases brought by the Commission and to hand down sanctions. Civil penalties should apply in cases where anticompetitive conduct is found.

The report added that the Government should also garner public views on the new competition law and regulatory structure before their introduction, and plan and implement resources for the structure's establishment.