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Articles: Competition

LegCo passes Competition Bill
HK Government, 14-Jun-2012
Measures to water down Competition Bill
HK Government, 25-Oct-2011
StockMax and competition for HKEx
We look at the implications of HSBC's proposed StockMax dark pool with retail investor participation. It's a wake-up call to the Government, SFC and HKEx that we need to move forward with allowing competition to innovate services both inside and outside HKEx. We propose measures to achieve this while preserving fair and orderly markets. (7-Aug-2011)

CNH spread
In a 4-bank survey, Webb-site looks at the wide spreads and differing prices offered by HK banks to residents for exchange between HKD and CNH, the offshore proxy for the mainland CNY. (13-Jun-2011)
LCQ: the competitiveness of the Hong Kong stock exchange
HK Government, 6-Apr-2011
Comment: nothing prevents a "flash crash" in HK, and indeed we had a mini-version of this in HSBC on 9-Mar-2009. There are no circuit-breakers on SEHK. Regarding trading spreads, HKEx U-turned on that in 2007 and there has been no progress since then.

HKSAR v cooked food stall bidders
HK Court of Final Appeal, 13-Dec-2010
The CFA upholds the Court of Appeal ruling.
Arculli's rant against competition for HKEx
The HKEx Chairman has apparently launched a campaign to exempt it from the Competition law currently going through LegCo. We dissect his factually flawed and technophobic arguments. Investors in HKEx should not expect its monopolistic profit margin to continue forever. Let the competition begin. (29-Jul-2010)

HKSAR v cooked food stall bidders
HK Court of Final Appeal, 9-Jul-2010
The CFA grants an extension of time and leave to appeal on a point of law.
Competition Bill gazetted
HK Government, 2-Jul-2010
The bill claims to be a "cross-sector" competition law, but the merger provisions only apply to the telecoms sector. So competitors can avoid price-fixing by merging.
HK's competition bill
HK Gazette, 2-Jul-2010
HKSAR v cooked food stall bidders
HK Court of Appeal, 26-May-2010
The Court of Appeal refuses to certify points of law for the Court of Final Appeal.
Cathay Pacific on OFT Investigation
Company announcement, 23-Apr-2010
"Cathay Pacific has a policy of full compliance with competition law" - but we'd be shocked if they had a policy of non-compliance with any law! Then again, the company pleaded guilty in 2008 to USA criminal price-fixing charges on air cargo from HK to the USA and elsewhere and was fined US$60m.

UK OFT issues statement of objections against Cathay Pacific Airways and Virgin Atlantic
UK Office of Fair Trading, 22-Apr-2010
Comment: price-fixing in HK remains perfectly legal - we still don't have a competition law.

Cooked auctions in HK
A Court of Appeal judgment overturns fraud convictions for bid-rigging for cooked food stalls at Tai Po Hui Market and makes clear that bid-rigging is perfectly legal. We call for the proposed competition law to make bid-rigging, price-fixing and other anti-competitive behaviour criminal offences. Civil tribunals won't cut it, not least because they cannot fine humans. In the meantime, the Government should include no-rigging warranties as a requirement for all tenders, so that they can prosecute for fraud. (8-Apr-2010)

HKSAR v cooked food stall bidders
HK Court of Appeal, 1-Apr-2010
Government supermarket vouchers
Supermarket vouchers are often used as a sales incentive in HK, for anything from minibonds to TVs. The Government's last proposal for a competition law would still allow behaviour such as resale price maintenance, which the EU outlaws because it is "severely anti-competitive". Have you ever wondered how much those supermarket vouchers actually cost? A government tender to buy them reveals the answer. (27-Mar-2010)

Class actions for HK
In a potentially huge step forward for access to justice, the Law Reform Commission proposes a class action system for HK. The key issue is litigation funding. Rather than a government-sponsored gatekeeper fund, we need a free-market approach, with contingent legal fees and the abolition of archaic laws against champerty and maintenance, to allow self-funded lawyers and third party funders to bear the risks of loser-pays-costs. Take our opinion poll and tell them what you think! (17-Mar-2010)

Consumer Council's own-goal
In a spectacular own-goal against consumers, the Hong Kong Consumer Council has called for support of the "no-surcharge" rule for credit and charge cards, an anti-competitive rule which other countries have outlawed. It maintains higher consumer prices, boosts card issuers' profits, encourages consumer debt and distorts the payment system against cash and debit cards. It should be outlawed. (23-Aug-2008)

19 jailed for defrauding FEHD over bidding of cooked food stalls
ICAC, 19-May-2008
The convictions were later quashed by the Court of Appeal, and this was upheld by the Court of Final Appeal.
Government Blocks Free Market in Tickets
Imagine a securities law which allows IPOs but bans share-trading above the IPO price. That, in a nutshell, is a description of the law on the market for entertainment tickets in Hong Kong. We call on the Government to stop interfering in private contract and wasting law-enforcement resources, and allow the resale of tickets at free market prices. Legalising ticket trading would create new employment, increase profits tax revenue and help set ticket prices in the primary market. (7-Sep-2005)

Hong Kong's casino
Never mind Lantau, Hong Kong does have a fully operational casino with a legally protected monopoly. We comment on the M-chip craze and the hypocrisy that permits the public to take risks in the markets and on property, but prohibits risk-taking in other forms of gambling outside of the Jockey Club monopoly. We call for liberalisation of the gambling sector. (24-Nov-2004)

Monopolies Rule
A secret unofficial translation of a government TV commercial promotes Hong Kong's monopolistic economy while appearing to promote the rule of law. (28-Mar-2003)

Commission Deregulation: No More Delays
How ironic that in a week in which Hong Kong was again named the World's freest economy, the Government was talking about further delaying the abolition of minimum commissions to protect the inefficient small broker cartel. So much for letting the market pick winners. If the Government believes in free markets, it must allow brokers and clients to negotiate their rates. (13-Nov-2002)

Government Backs Cartel
In a move which highlights the fallacy of its claim to promote a free market economy, the HK Government has told HKEx, whose board it controls, to delay plans to scrap the minimum commission rule. We look at the wider aspects of what this says for competition policy in Hong Kong, and at the way vested interests dominate the debate on market reforms when investor representation is absent. We call again for the government to adopt the HAMS Proposal. (24-Jan-2002)

Smoking Gun
Webb-site.com has obtained a letter which provides an exclusive look at Legislator Henry Wu's anti-competitive attempt to maintain the brokerage cartel's fixed commission rates. In other jurisdictions, this kind of collusion and price-fixing would be illegal. Hong Kong badly needs a competition law. (5-Nov-2001)

Scrap the Cartel
Small brokers are launching a last-ditch effort to continue the indefensible minimum commission rate set by the SEHK, due to be scrapped on 1-Apr-02. Webb-site.com urges the Government to ignore them - the market is run for customers, not for brokers. Let the competition begin! (31-Oct-2001)

Hong Kong Needs a Competition Law
In this piece on economic governance, Webb-site.com looks at the pressing need for Hong Kong to establish a comprehensive competition law and an authority with investigatory powers, in line with accepted practice in most developed markets. The government-appointed Consumer Council first called for this in 1996, and it is a necessary condition for a World-class City. An edited version of this article first appeared in the Financial Times today in a debate with HKSAR Financial Secretary Antony Leung. (13-Jul-2001)

APES at the WEF
So what was it all about? Webb-site.com brings you a delegate's diary of the WEF's Asia-Pacific Economic Summit in Melbourne. We outline some of the issues surrounding globalisation. Next year the summit comes to Hong Kong, where competition regulation should be placed on the agenda. (17-Sep-2000)

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