The Hong Kong Special Administrative Region Government (HKSARG) is committed to promoting competition to enhance economic efficiency and free trade, thereby also benefiting consumer welfare. We believe that competition is best nurtured by allowing the free play of market forces and keeping intervention to the minimum. We will not hesitate to take appropriate remedial action when a business practice limits market accessibility or market contestability and impairs economic efficiency or free trade to the detriment of the overall interest of Hong Kong.

      The Competition Policy Advisory Group (COMPAG), chaired by the Financial Secretary, provides a high-level and dedicated forum to review competition-related issues which have substantial policy or systemic implications, and examine the extent to which more competition should be introduced in the public and private sectors. In 1998, COMPAG promulgated the Statement on Competition Policy to provide an overarching policy framework to guide sector-specific efforts to promote competition. COMPAG also advises bureaux and departments on policies and practices from the competition standpoint, and proposes initiatives to promote competition in different sectors. In 2003, COMPAG developed a set of guidelines to supplement the Statement on Competition Policy to provide pointers with objective benchmarks and principles to assess Hong Kong's overall competitive environment, define and tackle anti-competitive practices, and ensure consistent application of Hong Kong's competition policy across sectors.

      In June 2005, the HKSARG appointed a Competition Policy Review Committee to review the composition and functions of COMPAG and to make recommendations on the future direction for competition policy in Hong Kong. The review committee, which is made up mostly of non-official members, has submitted its report to COMPAG in June 2006, recommending that a new law with a clearly defined scope be introduced in Hong Kong to tackle anti-competitive conduct across all sectors.

      On 6 November 2006, the Government launched a public consultation exercise on the way forward for Hong Kong's competition policy. The consultation period ended on 5 February 2007. We found that there is significant support for the introduction of a new cross-sector competition law and the establishment of a Competition Commission. Whilst the public generally supports the introduction of a competition law, there are concerns in the business sector that the new law may adversely affect normal business operations, in particular those of small and medium enterprises. To address these concerns, we published on 6 May 2008 for comments a public consultation paper on the detailed proposals for a competition law. The feedback received during the three-month consultation period suggests that there is general support for the proposals in the consultation paper, although in certain areas respondents have put forward additional proposals ranging from detailed and technical legal points to recommendations on how we might enhance the clarity of the law and explain its likely effect to the public. We have prepared the draft legislation, taking into account the views submitted by the public. The Competition Bill was introduced into the Legislative Council on 14 July 2010. The relevant Legislative Council Brief can be downloaded here.

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