A History of Competition: The Impact of Antitrust on Hong Kong’s Telecommunications Markets

Posted by Social Science Research Network

A History of Competition: The Impact of Antitrust on Hong Kong’s Telecommunications Markets

By Sandra Marco Colino (The Chinese University of Hong Kong)

Hong Kong has only had cross-sector competition law since 2015, but the city’s telecommunications markets have been subject to sector-specific antitrust provisions for over two decades. The importance of nurturing an efficient, innovative, and competitive telecoms industry for Hong Kong’s economic prosperity was acknowledged already at the time the sector was liberalized in the 1990s. Yet until the late 2000s, the government vehemently opposed the adoption of competition law in virtually all other sectors of the economy. This paper examines the effectiveness of the regulatory framework set up to guarantee the protection of competition in the telecommunications sector in Hong Kong. The results of the liberalization process are certainly remarkable, and the city boasts very competitive telecoms markets. However, it is argued that the enthusiasm over the results of the liberalization process may have eclipsed important competition issues in local markets which could have been tackled through the development of a robust antitrust policy, but which were sadly left unheeded. On the basis of the analysis of the history of (sector-specific) competition law in the telecoms sector, the paper assesses the potential of the new Competition Ordinance to address the principal threats to competition in these markets. In doing so, the paper finds that while the new regulatory framework may be generally suitable to combat collusion, it is less clear that it will effectively combat the problems associated with the creation of market power through mergers, or the abuse of that power.

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