Speeches and Presentations



LCQ7: Implementation of the Competition Ordinance

Following is a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, to a question by the Hon Chung Kwok-pan in the Legislative Council today (October 23):

Question:

This Council enacted the Competition Ordinance (Cap. 619) (Ordinance) in June last year to put in place a legal framework for curbing anti-competitive conduct in various sectors, so as to build a sustainable and fair business environment and promote free trade. For the implementation of the Ordinance, the Chief Executive appointed the Chairperson and members of the Competition Commission (Commission) in April this year, while the Judiciary appointed the President and Deputy President of the Competition Tribunal (Tribunal) in July, to take charge of the enforcement of the legislation. In this connection, will the Government inform this Council:

(a) of the progress of the preparatory work undertaken by the Commission for the full implementation of the Ordinance (including the number of staff members to be employed and the payroll cost involved), and the progress of the preparatory work undertaken by the Judiciary for the operation of the Tribunal;

(b) of the implementation timetable for the various parts of the Ordinance, and when the drafting of the relevant regulatory guidelines and rules will be completed;

(c) given that the majority of owners of small and medium enterprises (SMEs) have little knowledge of the Ordinance, of the publicity activities to be launched by the authorities and the timetable for such activities; and

(d) how the authorities will help the business sector, particularly SMEs, to prepare for the full implementation of the Ordinance?

Reply:

President,

The Competition Bill was passed by the Legislative Council (LegCo) in June 2012 to become the Competition Ordinance (Ordinance) (Cap. 619). The objective of the Ordinance is to provide a legal framework to curb possible anti-competitive conduct in various sectors so as to maintain fair and sustainable competition in the market. A Competition Commission (Commission) is established under the Ordinance as an independent statutory body. It is tasked with the functions to investigate into anti-competitive conduct, promoting public understanding of the value of competition, as well as promoting the compliance with the Ordinance. A Competition Tribunal (Tribunal), which has primary jurisdiction over competition matters, is also established under the Ordinance. The Tribunal is in charge of hearing and adjudicating competition-related cases.

My reply to the various parts of the question is as follows:

(a) Since the appointments of Members to the Commission took effect in May 2013, the Commission has worked to set up its internal procedures, its financial and administrative systems, as well as to recruit the Chief Executive Officer and other staff members. To facilitate its work, the Commission has established a Staff Committee and a Finance and Administration Committee. A Government team has been seconded to the Commission to support its initial work before recruitment of its own staff.

The Commission has initiated the first round of recruitment since September, with global recruitment conducted for the top executives including the Chief Executive Officer, and local open recruitment for staff of all tiers. It is expected that staff members will gradually report duty in the first or second quarter of 2014. Upon completion of all rounds of recruitment, the Commission is expected to have some 50 staff members, with their annual salary and allowance totaling $46 million.

The Government has also been working closely with the Judiciary since the enactment of the Ordinance to prepare for the establishment of the Tribunal and related matters. The Judiciary is formulating Tribunal Rules relating to the operation and proceedings of the Tribunal (the Tribunal Rules are subsidiary legislation) and the President's directions, as well as making other necessary administrative arrangements to prepare for the full operation of the Tribunal.

(b) The Government will implement the Ordinance in phases. To this end, LegCo passed in January 2013 the Competition Ordinance (Commencement) Notice 2012. Provisions relating to the establishment of the Commission, the short title and commencement, interpretation, and the issue of guidelines by the Commission commenced on January 18, 2013.

Provisions relating to the establishment of the Tribunal and part of the provisions relating to its operation commenced on August 1, 2013.

One of the major tasks of the Commission leading to the full commencement of the Ordinance is the preparation of regulatory guidelines. According to the Ordinance, the Commission must consult LegCo and other relevant persons before issuing the guidelines. The Commission has initiated the preparatory work on the drafting of guidelines, including the engagement of consultants for legal and other expert services. The Commission has also started to gradually establish contact with competition authorities of other jurisdictions, international resource networks and various experts in the field, so as to learn from their experience and expertise. With the aim to enhance public understanding of the Ordinance, the Commission plans to reach out to members of the public of all sectors early next year to discuss the guidelines and other work relating to the implementation of the Ordinance.

The Ordinance will be brought into full operation when all relevant preparatory work in respect of the Commission and the Tribunal is completed. During this transitional period, the public and the business sector can familiarise themselves with the new legal requirements and make necessary adjustments to their business operations.

(c) and (d) The Commission intends to consult the public on the various sets of regulatory guidelines and discuss with relevant stakeholders (including small and medium enterprises (SMEs) on the draft guidelines in 2014. Such discussions will enhance SMEs' understanding of the Ordinance, and assist them in gearing up for its full implementation. The Commission will also promote public understanding of the Ordinance, and encourage the business community to develop risk management systems, good practices and internal controls as tools to achieve compliance. In addition, after the implementation of the Ordinance and in light of the experience accumulated, the Commission will further study measures to promote the continuous compliance with the Ordinance by the business community.

Wednesday, October 23, 2013