A complete retreat

Author: | Published: 31 Aug 2010

Rachel Evans Asia editor

Hong Kong tabled its long-awaited competition bill in July. In a sop to business, the proposed law does not include a merger review regime. But by bowing to corporate pressure, the law could damage deal certainty.

On July 14, Hong Kong's competition bill was introduced in the Legislative Council. As expected, the bill outlines two conduct rules to combat restrictive agreements and abuses of market power, but a merger regime is conspicuously absent.

"Most companies don't want merger rules as they're costly and delay transactions," says Marc Waha of Norton Rose. "This is a legitimate concern that's been expressed so vocally that the government has completely retreated. But as a result we have a regime that's fraught with legal uncertainty."

Only telecoms mergers will be subject to review, as is already the case under the Telecommunications Ordinance. Other M&A agreements must instead comply with the behavioural...