Thomas Cheng Interviewed on Whether the New Competition Law will Trigger Bankruptcies

"Competition law fears: big retailers may ease out smaller rivals"
Hong Kong Economic Journal
14 December 2015

Hong Kong’s Competition Ordinance, which is being fully implemented from today, could lead to a spate of bankruptcies among small retailers, industry players said.

     While the new law is deemed beneficial to consumers as it will encourage businesses to lower their prices, bigger retailers can easily undercut their rivals and force them out of the market, the players said.

     In effect, the ordinance may hinder rather than help foster competition, Apple Daily reported on Wednesday.

     Over the weekend, major consumer electronic chains, including Broadway, Suning and Fortress, started lowering the prices of some of their mobile phones by more than HK$1,000 (US$129) each, while those of Apple Inc.’s latest iPhone 6S and 6S Plus were also cut by HK$200 to HK$300.

     A survey conducted by the newspaper among several phone shops in Sham Shui Po showed that certain handset models were cheaper by several hundred Hong Kong dollars in bigger outlets than in smaller shops.

     The ordinance, which was launched by Secretary for Commerce and Economic Development Gregory So on Sunday, seeks to put a stop to price fixing, big rigging and other anti-competitive practices...

     Thomas Cheng, an associate professor at the Faculty of Law of the University of Hong Kong and a member of the Competition Commission, said it is hard to determine if full implementation of the ordinance will trigger a wave of bankruptcies.... Click here to read the full article.