Friday, March 23, 2007
Posted by D. Daniel Sokol
Yesterday, the Global Competition Review reported (password required) that Hong Kong likely will introduce a competition law. The Report on public consultation on the way forward for Hong Kong's competition policy (available here) lays out a blueprint for the law including its rationale, functions and answers to key questions.
I think that the possible introduction of a competition law in Hong Kong and the recent adoption of a competition law in Singapore tells us something very important about the role of competition policy in the global economy. These two jurisdictions often top various lists of the most market oriented economies in the world. These jurisdictions also tend to be among the most trade open economies. Yet, even in both of these jurisdictions, there is a sense that there is a need to create an agency to combat monopoly power and coordinated anti-competitive practices because the market cannot self correct easily against such practices. The Singaporean competition law contains exemptions for state owned enterprises from the law. My hope is that Hong Kong does not follow this approach. Public restraints of competition may in fact be worse than private restraints because once such legislation/regulation is introduced, it becomes far more difficult to eliminate such anti-competitive conduct due to public choice problems.
My own thoughts on international antitrust can be found here.