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Implementation of Competition Ordinance
2014-04-09

Following is a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, to a question by the Hon Charles Peter Mok in the Legislative Council today (April 9):

Question:

This Council enacted the Competition Ordinance (Cap. 619) in June 2012 to provide a legal framework to curb anti-competitive practices in various sectors in order to promote fair and effective competition. The authorities expect the Competition Commission (Commission) to commence enforcement of the relevant provisions of the Competition Ordinance next year. In this connection, will the Government inform this Council:

(1) whether it knows the progress of the work on drafting the regulatory guidelines and conducting consultation on the relevant matters by the Commission;

(2) whether it knows the Commission’s work plan for organising educational and publicity activities for the public and the trades; whether the Commission will prepare specific regulatory guidelines and host relevant seminars tailored made for individual trades and industries, so as to assist various trades in understanding the requirements of the Competition Ordinance and to enhance their knowledge of anti-competitive practices, such as collusive price-fixing and abuse of market power;

(3) whether it knows if the Commission will (i) monitor the anti-competitive practices in individual trades and industries in order to promote a level-playing field in Hong Kong, and (ii) monitor any anti-competitive phenomenon caused by the economic activities of exempted statutory bodies, so as to ensure that these bodies do not abuse the exemption arrangement; and

(4) given that the competition provisions of the Broadcasting Ordinance (Cap. 562) and the Telecommunications Ordinance (Cap. 106) will be repealed upon the implementation of the relevant transitional arrangements, and that concurrent jurisdiction over such matters will be conferred on the Commission and the Communications Authority (CA) under the Competition Ordinance for which they should prepare and sign a Memorandum of Understanding (MOU) as soon as possible to co-ordinate the performance of their respective functions under the Competition Ordinance, whether it knows the contents of the MOU, if the Commission and CA will consult this Council and the public on such contents, and how they will handle complaints about anti-competitive practices in the broadcasting and telecommunications industries; if there will be consultations, of the details and their timetable?

Reply:

President,

(1) and (2) Since the enactment of the Competition Ordinance (Ordinance)(Cap. 619), the Government has been working closely with the Competition Commission (Commission) to prepare for the full implementation of the Ordinance. One of the major tasks of the Commission leading to the full commencement of the Ordinance is the preparation of guidelines. The Commission’s priority this year is to conduct consultation on various documents required under the Ordinance. These documents include guidelines on the competition rules, complaint handling and investigations. The Commission has initiated the preparation of the related documents, and has engaged legal consultants to advise on such preparatory work.

The Commission’s plan is to conduct promotion of the Ordinance, and discuss with members of the public and various sectors on matters that the Commission should take into account when formulating the guidelines. The Commission expects that such promotion and discussions will enhance public understanding of the Ordinance, enable small and medium enterprises and other sectors to have a better grasp of the provisions of the Ordinance and their implementation details, as well as to facilitate their making of the necessary preparation for the full implementation of the Ordinance. The Commission also plans to discuss with the business community on how to develop risk management systems, good practices and internal control tools to achieve compliance with the Ordinance and the guidelines.

The Commission plans to start the relevant promotion and discussions with various sectors in the first half of this year and, depending on the work progress, consult the Legislative Council (LegCo) on the relevant documents before end of this year.

(3) At present, the Commission is to focus first and foremost on the preparatory work that is required for the full commencement of the Ordinance. The Commission is also keeping a close watch on the views on competition issues in the community. As regards statutory bodies exempted from the Ordinance, they should adhere to the competition rules despite that they do not come under the regulatory purview of the Commission. The Government will seek to ensure that unless there are justifiable causes, the exempted statutory bodies will not engage in anti-competitive activities.

(4) The Ordinance provides that the Communications Authority (CA) will have concurrent jurisdiction with the Commission in respect of the investigation and bringing of enforcement proceedings of competition cases in the broadcasting and telecommunications sectors. On the handling of complaints against anti-competitive practices, the Commission and the CA will conduct enforcement actions in accordance with the requirements on concurrent jurisdiction in the Ordinance upon the full commencement of the Ordinance.

The Commission and the CA have initiated the preparation of the memorandum of understanding (MoU) as required under the Ordinance. The MoU seeks to co-ordinate the performance of functions of the Commission and the CA under the Ordinance, and set out the detailed arrangements for the two bodies in respect of dispute resolution, provision of assistance, allocation of responsibility, supply of information, authorship of educational materials or guidelines, etc.. The Commission and the CA expect to consult the LegCo on the draft MoU before end of this year.

Ends/Wednesday, April 9, 2014

Office Of Hon. Charles Mok, Legislative Councillor (IT)