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Competition policy under laissez-faireism : market power and its treatment in Hong Kong
Review of Industrial Organization
  • Kwan Yiu, Edward CHEN, Lingnan University, Hong Kong
  • Ping LIN, Lingnan University, Hong Kong
Document Type
Journal article
Publication Date
  • Competition policy,
  • Laissez faire,
  • Sectoral approach

The paper describes the current competition policy framework in Hong Kong: how it came into existence, what business practices are prohibited, and how the enforcement system works. Recent cases in the telecommunications industry are used to illustrate the sectoral approach, a unique feature of Hong Kong's competition policy. We argue that a sectoral approach faces two fundamental drawbacks. First, due to having different "rules of the game'' for different sectors, the allocation of resources may be distorted in the long run. Second, since the relevant regulatory agencies perform dual roles both as competition policy enforcer and as traditional regulator of natural monopolies, the impartiality of their competition decisions may not be credibly conveyed to the public. We also address other specific problems associated with the sectoral approach, such as the exclusion of structural issues, narrow coverage of sectors, and the lack of public enforcement. We conclude that an overall competition law can better promote competition and economic efficiency in Hong Kong.

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Copyright © 2002 Kluwer Academic Publishers

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Additional Information
Paper presented at the Workshop on Treament of Market Power in East Asian Economies, Jun, 2001, Taipei, Taiwan.
Full-text Version
Publisher’s Version
Citation Information
Chen, E. K. Y., & Lin, P. (2002). Competition policy under laissez-faireism: Market power and its treatment in Hong Kong. Review of Industrial Organization, 21(2), 145-166. doi: 10.1023/A:1019621426648