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Competition Bill gazetted

     The Government today (July 2) gazetted the Competition Bill, which provides a legal framework to enhance the effective implementation of Hong Kong's competition policy. The Bill will be introduced into the Legislative Council on July 14, 2010.  

     The Secretary for Commerce and Economic Development, Mrs Rita Lau, said the Bill, drafted after extensive public consultation, reflected the aspiration of the society for a cross-sector competition law.  

     "We have taken into account the views expressed during the consultation exercises and carefully crafted the provisions with a view to meeting the circumstances of Hong Kong," she said.

     Describing the Bill as a milestone in the Government's competition policy, Mrs Lau said it would be conducive to meeting the policy objectives of enhancing economic efficiency and the free flow of trade through promoting sustainable competition, thereby bringing benefits to both the business sector and consumers.

     The Bill aims to prohibit and deter undertakings in all sectors from adopting anti-competitive conduct which has the object or effect of preventing, restricting or distorting competition in Hong Kong.  

     It sets out the competition rules prohibiting anti-competitive conduct in three major areas, namely agreements, decisions and concerted practices (the first conduct rule); the abuse of a substantial degree of market power in a market (the second conduct rule); and mergers or acquisitions of carrier licensees under the Telecommunications Ordinance that have, or are likely to have, the effect of substantially lessening competition in Hong Kong (the merger rule).  To enhance the certainty and clarity of the law, the Bill will require the Competition Commission to draw up regulatory guidelines on the interpretation and implementation of the competition rules.  

     A judicial enforcement model is provided under the Bill.  An independent statutory Competition Commission will be established to investigate and bring public enforcement action in respect of anti-competitive conduct.  It will also be vested with the powers to accept commitment from, or issue an infringement notice bearing a sum of payment up to $10 million to, a person to take or refrain from taking certain actions to address the Commission's concerns about a possible contravention of the rules in exchange for cessation of investigation and/or proceedings against the person. The Commission will be led by a chairperson and comprise not less than five members (including the chairperson) appointed by the Chief Executive.

     A Competition Tribunal will be set up within the Judiciary as a superior court of record to hear and adjudicate on competition cases brought by the Commission and private actions, and is empowered to apply a full range of remedies for contravention of a competition rule, including pecuniary penalties not exceeding 10% of the turnover (including global turnover) for the year in which the contravention occurs; award of damages to aggrieved parties; interim injunction orders; termination or variation of an agreement, etc.  The Tribunal may also review certain determinations of the Commission.  Every judge of the Court of First Instance (CFI) will, by virtue of his or her appointment as CFI Judge, be a member of the Tribunal.  The Chief Executive will, on the recommendations of the Judicial Officers Recommendation Commission, appoint one of the members of the Tribunal to be the President of the Tribunal.   

     In addition to public enforcement by the Commission, the Bill also provides for private actions which could either follow on from a determination of the court, or could be stand-alone actions seeking a judgment on particular conduct and remedies.

     Following international best practices, the Commission is empowered to decide whether or not an agreement or conduct is excluded or exempt from the conduct rules on grounds that the agreement enhances overall economic efficiency; the undertaking concerned is entrusted with the operation of services of general economic interest; or the agreement is made to comply with a legal requirement.  The Chief Executive in Council (CE in Council) is also empowered to make orders to exempt agreements or conduct if there are exceptional and compelling reasons of public policy to do so, or if exemptions are required to avoid a conflict with international obligations.

     Separately, as activities of the public sector are almost invariably non-economic in nature, the Bill will not apply to the Government.  The Bill will not apply to statutory bodies or their activities unless the CE in Council determines otherwise.  The determinations will be made having regard to a number of criteria set out in the Bill and done by way of regulations.    

Ends/Friday, July 2, 2010
Issued at HKT 11:01


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