OECD: Promoting Competition, Protecting Human Rights Panel Paris, 1 Dec 2016

Anna Wu Competition Commission, HKSAR

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Links between competition

and human rights • Intersects with consumer welfare and corruption

• Unwarranted rising cost could be argued as infliction of loss on users individually and on society collectively

• Lack of competitive forces retards innovation and overall development

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• Fair access to a market rebalances utilization of resources and achieves greater efficiency

• Competition law creates enforceable rights and the pursuit of a remedy is itself a human right

• Competition supports access to medicine, food and jobs

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The telephone story

• 1990s - deregulation commenced supported by the requirement for interconnectivity between networks and portability of numbers

• Jan 2003 - local fixed telecommunications market fully liberalized

• Choice, price reduction, investment and new technology:

1996 to 2002 - cumulative savings of USD9bn or HKD70.2bn recorded in the mobile industry

1999 to 2001 - cumulated savings USD4bn or HKD31.2bn for the international sector

1991 to 2001- investment in telecommunications industry increased by USD12bn

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Building renovation and maintenance market

• May 2016 - Competition Commission published its

findings on bid rigging in this market

• Bid rigging and corruption resulted from:

- money and scale involved

- impropriety in building management

- property owners lacking expertise

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• The Commission analyzed confidential tender records for some 500 projects using screening techniques

Study focused on:

- tender participation and tender successes

- whether bid amounts reflected the costs of providing underlying services

Study reflected:

- 65% of consultant contracts below cost

- pairing of groups

- inference of extensive bid rigging

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The Garden Vista Project

• Bid rigging intersects with corruption

• Bribes worth about USD5.6mil or HKD45mil were offered

• The renovation contract was awarded at USD33mil or HKD262mil

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Corruption

• Socio economic factors produced different types of corruption and rigging at different times:

- in our massive public housing market in the 1970s

- in illegal rebates, commercial frauds and finance and bank related corruption in the 1980s

- in the overheated construction market in the 1990s

- in our stock market through “ biscuit sharing “, acceptance of preferential allocation of shares for listing of companies exposed around the global stock market crash on 19 Oct 1987

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• Corruption affected:

- public hospital care

- safety standards of buildings

- public health and safety related licenses

- disciplined services including the police force and fire services

The Competition Commission has a collaborative working relationship with the Independent Commission against Corruption, the Police and the Securities and Futures Commission

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Due Process and the TVB case

• Competition Ordinance adopts a judicial enforcement model

• Decision of Communications Authority was quashed for procedural unconstitutionality because of a lack of independent and impartial tribunal

([2016] 2 HKLRD 41)

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• TVB imposed restrictions on artistes and singers, regarded as having prevented, distorted and substantially restricted competition

• TVB was required to end the infringement and to undertake remedial actions

• TVB applied for judicial review

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• Contracts for occasional use contained clauses with restrictions as follows:

- Prohibition of engagement by any other television service without prior consent

- Mandating outright exclusivity unless otherwise consented

- Requiring prior notice before performing for another in HK

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- No original voice policy prohibiting original voice being used in productions for other local television stations featuring the artistes leading to dubbing

- No promotional activities for productions in which the artistes star in broadcast by other local television stations even if rival has acquired rights to broadcast overseas

- No Cantonese policy for rivals by practice

(but not in contract)

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Rights and remedies

• International Covenant on Civil and Political Rights

(Art 2) requires the creation of rights enforceable by

competent judicial, administrative or legislative

authorities and the provision of effective remedies

• Both ICCPR (Art 14) and our Bill of Rights (Art 10) establish the right to fair and public hearing by an impartial tribunal established by law

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• The right to pursue a remedy under competition law is a human right and enforcement must follow due process

• Competition law does not by itself create rights to medicine, food or jobs, it promotes the same objectives and is a means to enhance enjoyment

• It measures economic gain or loss

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• International Covenant on Economic, Social and Cultural Rights (Art 6) protects the right to work. Removing artistes’ access to job market and restricting rival’s engagement of their services are two sides of the same coin

• “Follow-on actions” is a weak remedy for private actions

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