Editorial | More must be done in Hong Kong’s fair competition push

Hong Kong prides itself as an open economy with level playing fields and fair competition for all. However, the free market may be compromised by some long-standing malpractice or dominance of individual players in certain trades. Thankfully, the situation is being rectified as the Competition Commission steps up education and enforcement of antitrust legislation. In a positive step, the statutory watchdog has launched a website to help small and medium-sized enterprises (SMEs) better navigate the Competition Ordinance. This followed a survey showing that while more than 70 per cent of respondents believed the ordinance may help curtail anticompetitive activities, only a quarter were adequately equipped to comply with the law.

With the survey showing just 24 per cent of SMEs interviewed had implemented measures or introduced training to ensure compliance, it is hoped that the new website can help fill the gaps. It covers four areas: details of the ordinance, risk assessment, information for SMEs to identify whether they are victims of anticompetitive practices, and a template that helps firms design a compliance programme. The commission said the materials covered up to 90 per cent of what SMEs needed to know about the ordinance and would help provide resources that many businesses lacked.

The statutory watchdog was established following the enactment of the antitrust legislation in June 2012. While business awareness of the dos and don’ts has been on the increase over the past decade, there is still room for improvement when it comes to compliance and efficiency. After more than three years of proceedings, a cartel case involving a public housing cleaning service has finally concluded with a HK$22 million penalty and three director disqualification orders imposed by the Competition Tribunal.

The fight against anticompetitive trade practices is still a work in progress. As the watchdog conceded, a misunderstanding about what is prohibited under the law remains, such as the belief that a cartel arrangement is legal if it does not influence the market price. More proactive efforts are needed to ensure compliance by SMEs with legal requirements.