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Hong Kong Competition Law

Comparative and Theoretical Perspectives

Kelvin Hiu Fai Kwok , Thomas K. Cheng

Business & Economics / Industrial Management

"Introduction I. Historical Background Seven years after the passage of the Competition Ordinance (the Ordinance) and four years after it came into effect, it is easy to forget how remarkable the journey has been for the adoption of competition law in Hong Kong. Since the early 1990s, when the Consumer Council, a quasi-governmental consumer protection body, began advocating for a competition law in Hong Kong, the Hong Kong government had strenuously resisted calls for competition legislation on the ground that the city's economy was already highly competitive due to its lack of trade barriers. The lack of trade barriers meant that any firm could enter the city's markets easily and discipline the existing market players. The ease of market entry would keep the exercise of market power to a minimum. The fallacy of this argument is easy to see. While the lack of trade barriers may allow competition in the markets for tradeable goods, it has no bearing on the degree of competition for non-tradeable services. Openness to trade would not save the domestic market from a monopolistic retailer, for example. As it turns out, non-tradeable services are exactly where the competition problems in the Hong Kong economy lie. The flaws of this argument, however, have not deterred the Hong Kong government from using it to oppose the adoption of competition law, both domestically and in international fora. When the World Trade Organization (WTO) was deliberating on the inclusion of competition law within its ambit under what were known as the Singapore issues, the Hong Kong government was vehemently opposed to it. The Singapore issues were eventually dropped from the WTO agenda, but the domestic debate on competition law continued"--
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