The draft competition law contains ambiguities and pitfalls that could sink hopes for passing the bill in a timely manner, the Hong Kong General Chamber of Commerce says.

Anthony Wu, chairman of the Chamber, said Tuesday that unless the government addresses the Chamber's concerns, it is unlikely the bill will be passed into law before the legislative session ends in July 2012.

He said the business community is not opposed to a competition law in Hong Kong, however, it must be unambiguous and should not impose any financial burden on enterprises especially small and medium enterprises. Business community representatives should be allowed to sit on the competition commission as the regulatory body, he said.

Jeffrey Lam, who represents the Chamber in the Legislative Council, voiced his own regrets that the views of the business community are not reflected in the bill. He declined comment when asked if he believed the Commerce and Economic Development Bureau failed to grasp the views of the business sector when the law was drafted.

"Together with the three other business chambers in Hong Kong, we met Secretary for Commerce and Economic Development Rita Lau last week to express our views," said Wu. "The atmosphere was very friendly and open. It should not be construed as the business community pressuring the government. Neither had we complained against her undersecretary Gregory So, who is responsible for presenting the bill to the Legislative Council Bills Committee."

As a member of the bills committee, Lam noted ambiguities in the bill, which are in his opinion traps that enterprises could easily and inadvertently fall into.

"Take for example price-fixing, which is one of the seven malpractices that the competition law targets, the bill is so ambiguous and far-fetching that two oil companies who agree to raise the price per barrel by the same margin following an increase in imported price could be prosecuted," he commented.

Wu added a further example of two cafes being accused of price-fixing by agreeing to increase the price of coffee by HK$2 per cup. "But in fact, their individual market share is less than 1 percent, which is far from being dominant or influential," he contended.

He urged the government to provide more guidelines and examples of infringements of the proposed competition law.

Wu also called on the government to take heed to the local situation and business environment, instead of copying competition legislation of the European Union countries as far as penalties are concerned.

"A penalty can serve as a deterrent. It cannot be too harsh. Otherwise it will affect the competitiveness of Hong Kong," he said, with reference to the proposal that 10 percent of the global income of an enterprise be charged as penalty. "The penalty should apply to the implied service or product only, rather than the entire business operation of an enterprise, as 10 percent of the global income can be very huge."

China Daily

(HK Edition 12/22/2010 page1)