The Government is committed to promoting competition to enhance economic efficiency and free trade, thereby also benefiting consumer welfare.

The Competition Policy Advisory Group (COMPAG), chaired by the Financial Secretary, was established in December 1997 to provide a high-level and dedicated forum to review competition-related issues which have substantial policy or systemic implications, and examine the extent to which more competition should be introduced in the public and private sectors. It promulgated a Statement on Competition Policy in May 1998 to provide an overarching policy framework to guide sector-specific efforts to promote competition. COMPAG has also been giving advice to bureaux and departments in reviewing policies and practices from the competition standpoint, and in proposing new initiatives to promote competition in different sectors.

To supplement the Statement and encourage all sectors to proactively implement Hong Kong's competition policy, COMPAG has, in consultation with 30 chambers of commerce, trade and industry organizations, as well as the Consumer Council, developed a set of guidelines in 2003 to provide pointers with objective benchmarks and principles to assess Hong Kong's overall competitive environment; define and tackle anti-competitive practices; as well as to ensure consistent application of Hong Kong's competition policy across sectors.

COMPAG publishes an annual report on its work every year. It also receives and takes follow-up actions on competition-related complaints.

To ensure our competition policy keeps pace with the times and continues both to serve the public interest and to facilitate a business-friendly environment, COMPAG, in June 2005, appointed a Competition Policy Review Committee to review the composition and functions of COMPAG and to make recommendations on the future direction for competition policy in Hong Kong. The review committee, which is made up mostly of non-official members, has submitted its report to COMPAG in June 2006, recommending that a new law with a clearly defined scope be introduced in Hong Kong to tackle anti-competitive conduct across all sectors.

On 6 November 2006, the Government launched a public consultation exercise on the way forward for Hong Kong's competition policy. The consultation period ended on 5 February 2007. We found that there is significant support for the introduction of a new cross-sector competition law and the establishment of a Competition Commission. Whilst the public generally supports the introduction of a competition law, there are concerns in the business sector that the new law may adversely affect normal business operations, in particular those of small and medium enterprises. To address these concerns, we published on 6 May 2008 a public consultation paper on the detailed proposals for a competition law. The feedback received during the three-month consultation period suggests that there is general support for the proposals in the consultation paper, although in certain areas respondents have put forward additional proposals ranging from detailed and technical legal points to recommendations on how we might enhance the clarity of the law and explain its likely effect to the public. We will prepare the draft legislation, taking into account the views submitted by the public. Our target is to introduce the Bill in the Legislative Council in the 2008-2009 legislative session.