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Competition bill to exempt most statutory institutions
By Joseph Li
Published: Feb 14 2012 10:15
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Over 570 of Hong Kong’s statutory bodies will enjoy exemption from the Competition Bill regulation, announced on Monday. Six statutory bodies were not granted exemption because they fall within all four criteria set out in the Bill. The Federation of Hong Kong Industries, Ocean Park and Matilda and War Hospitals were denied exemption under the act.The government announced the legal framework of the exemption arrangement as listed in the Competition Bill on Monday.

The government will consider whether a statutory body engages in economic activity in direct competition with similar undertakings; and whether the economic activity affects the efficiency of a specific market. There is no exemption if the economic activities of the statutory bodies are not directly related to provision of essential public services or implementation of public policy, or if there are no compelling reasons of public policy against favoring an exemption.

The Hong Kong Trade Development Council, Hospital Authority, Housing Authority and the Housing Society were among those granted exemptions.

Although the majority of statutory bodies are exempt from the law, they still need to comply with the competition rules, said a government source. The exemption is not perpetual, the source added. If complaints are substantiated that the exempt bodies have breached the competition, there is the likelihood that they will be put under regulation.

As to Ocean Park being put under regulation of the competition law, the source said it does mean the theme park has done things that are anti-competitive. The park is engaged in an economic activity, its market share is not insignificant and again, there is no strong policy reason to exempt it.

Lawmaker Andrew Leung, who is also honorary president and representative of the Hong Kong of Federation of Industries (HKFI) at LegCo, is unhappy with the arrangement. “I am disappointed by the HKFI’s inclusion as it is neither a business entity nor a profit-making entity. Our role is simply to help and support the enterprises, particularly the small & medium enterprises,” he said.

Leung, who happens to be chairman of the Bills Committee vetting the bill, urged the government to explain its justifications at Tuesday’s committee meeting. As committee chairman, he has convened a public hearing to listen to views of stakeholders on the exemption arrangement on Feb 28.

Another committee member Wong Ting-kwong expressed concern with the threshold of the proposed de minimis arrangement, under which enterprises whose annual turnover is below $11 million are not considered to have an appreciable impact on competition and not subject to action by the competition authorities.

In his view, the average daily turnover of $30,000 is too low and offers little protection to SMEs and should therefore be increased.

joseph@chinadailyhk.com

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