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Hong Kong Competition Commission targets petrol market

Hong Kong's new competition commission will investigate the petrol market as one of its first targets, according to the South China Morning Post29 Apr 2015

The Hong Kong government is introducing a new law, called the Competition Ordinance, which will come into full effect by the end of 2015. The competition commission was set up to enforce the ordnance.

Anna Wu Hung-yuk, chairwoman of the commission, told a meeting of the Legislative Council's economic development panel that the body has already begun an initial study of fuel prices and the market, prompted by a report by the Hong Kong Consumer Council, the South China Morning Post reported.

In February, the consumer council criticised petrol companies for being "quick going up, slow coming down" in adjusting prices in response to international crude oil prices. It suggested that the government should release regular information on crude oil prices and other costs of petrol production, to keep consumers informed.

Competition commission chief executing Stanley Wong, however, said that the commission does not have the powers it needs to undertake a full investigation, even under the new law.

"Our powers to get information to study the market are very limited. We cannot compel a company to turn over information," Wong said, according to the South China Morning Post.

The commission needs received specific complaints in order to investigate fully, he said. "If we think there's sufficient information then we can use our enforcement power to get more information … [and] get a search warrant," the South China Morning Post reported.

Undersecretary for the environment Christine Loh Kung-wai told the panel: "At the end of the day, the commission would approach the government for further information. On this, we would definitely be cooperative," the South China Morning Post said.

Competition expert Mohammed Talib of Pinsent Masons, the law firm behind, said: "This is the first indication we have of what kind of investigations the commission may conduct when the ordinance comes into force later this year and where its initial priorities lie." 

"Also, it appears that the commission is taking a cautious approach to exercising its investigatory powers; more cautious than has been expected by many businesses in Hong Kong," he said.

"The ordinance permits the commission to investigate when it has reasonable cause to suspect a contravention of a competition rule even when there has been no complaint. The Commission’s decision to wait for a formal complaint before it exercises its investigatory powers suggests that it does not consider it to have such cause based on the Consumer Council investigation," Talib said.

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