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Competition doesn’t stick

Competition doesn’t stick

A team of Gilbert + Tobin lawyers has worked on a report on competition in the Hong Kong auto-fuel market with Hong Kong based Arculli & Associates (now merged into Arculli Fong & Ng,…

A team of Gilbert + Tobin lawyers has worked on a report on competition in the Hong Kong auto-fuel market with Hong Kong based Arculli & Associates (now merged into Arculli Fong & Ng, the Hong Kong affiliate of China’s largest law firm, King & Wood) and NERA Economic Consulting.

The firms were commissioned to assess the competitive environment and potential for anti-competitive conduct in the auto-fuel retailing sector by the Hong Kong government in 2005.

Peter Waters, a Gilbert + Tobin partner who has been based in Hong Kong for the past five years, said the firm had worked with Arculli & Associates on a number of competition projects in the Asia-Pacific region. “There is no competition law in Hong Kong currently so there is no real market experience of doing market analyses,” he said.

“They basically needed to look to overseas experience of competition law.” He said the government was also in the process of considering whether or not to introduce competition law to Hong Kong.

Waters said the study was conducted in the same way that a competition authority like the Australian Competition and Consumer Commission would look into allegations of price fixing.

This was done without the ACCC’s advantage of having the power to compel the production of information for such investigations, but Waters said a reasonable amount of information was obtained.

The report found no evidence of price collusion in Hong Kong, but did find that consumers in that market pay comparatively high prices to the rest of the world, and that oil company margins in Hong Kong are significantly higher than in other countries.

Recommendations to improve competition include improving the transparency of the auction process for petrol stations and reducing restrictions on site use to allow for increased non-fuel retailing at petrol stations. Waters said the government would consider the recommendations made in the report, including that there be rules against cartel behaviour and mergers. That decision will be part of the government’s review into whether or not the Special Administration Region should introduce competition law.

Liza Carver led the G+T team in Australia.

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