Introduction

The HKSAR government's public policy approach to competition regulation is founded on scepticism as to the need for, or desirability of, competition legislation. If competition failures can be identified and ‘proved’ to the government's satisfaction, consideration may be given to rectifying such proven market failures. Stated government policy is to employ exhortation to amend business practices, followed by administrative action to encourage change, with legislative intervention as very much a last resort. Such statutory intervention will be sector specific and confined to addressing only the competitive failures identified in the narrow sector to be regulated.

At first blush, this approach appears to be at least consistent with the government's philosophy of ‘small’ government and creative nonintervention in economic decision-making and might be thought to be a limited and proportionate response to specifically identified problems. This profound scepticism about the value of competition law does have some support from the academic authors of the economic freedom indices mentioned in the last chapter. But whether this analysis is correct is questionable.

Firstly, as has been demonstrated in chapter 7, the government's case that Hong Kong's domestic economy is a structurally free and open one is decidedly weak. Secondly, the assertion that competition problems are few and minor flies in the face of the available evidence. Thirdly, the government has no legal tools to undertake economic investigations to discover whether or not sectors of the domestic economy are competitive.