The Consumer Council welcomes the issue of the Government's Statement on Competition Policy as a significant step to bringing about the improvements in the competitive environment in Hong Kong called for in the Council's report, Competition Policy: the Key to Hong Kong's Future Economic Success.
For the first time, the Government has
- issued guidance on the practices such as price-fixing and resale price maintenance that it considers may be harmful;
- accepted that cases by case determination must be made as to whether practices are detrimental;
- defined a role for the Secretariat of COMPAG (the high level Competition Policy Action Group chaired by the Financial Secretary) in keeping track of all competition complaints referred to the Government; and
- announced that it will take administrative or legal steps when it considers it necessary to end a restrictive practice.
The Council also welcomes the Government's commitment to raising public awareness of the importance of competition and briefing Departments, Bureaux and the private sector on the guidelines.
The Council understands that the Government's initial intention is to concentrate on areas where its actions have a direct effect on the market to ensure that its own rules and practices are not anti-competitive. Although it is right that Government should examine its own house, many of the anti-competitive practices that affect consumers stem from agreement within the private sector.
Examples are:
- agreements by a certain trade to charge a designated price
- The imposition of minimum prices by manufactures which stop efficient shops passing on savings to consumers
It is therefore important that the Government should make public disclosure of its complaint procedures - the way in which it will determine complaints and on the complaints it has received and the decisions it has reached.
This will of course form a vital part of the databank which the Government will establish to facilitate the identification of possible deficiencies and areas for improvement. Transparency on this central repository of competition-related concerns and complaints is also of great importance.
The Council envisages that in due course, the Government may have to consider setting up an advisory service on anti-competition matters to cater for the need for guidance from the private sector.
The Council believes that, ultimately, the business community will require the certainty on the scope of prohibited activities and the consequences of breaching the prohibitions that only a Competition Law can provide.
Until a Competition Law and a Competition Authority are established the Council is pleased to continue working in partnership with Government. It will continue to refer complaints of specific anti competitive practice such as resale price maintenance or discriminatory pricing as well as examining structural problems in industries such as the supply of rice and of chicken.
The Council is already, as the Government has requested, working to draw up codes of practice that will establish a benchmark for companies and trade associations to use to help them improve the level of trade practices in Hong Kong.