The Competition and Consumer Commission of Singapore (CCCS) has been at the forefront of antitrust issues in the e-commerce and digital space in South-east Asia. On 13 April 2018, it imposed its first-ever interim measures directions on the acquisition by Grab of Uber’s South-east Asian assets on 26 March 2018, which was followed by a proposed infringement decision on 5 July 2018. This was not the first intervention by the CCCS in the e-commerce space and comes on the back of publicised investigations by the CCCS in 2013 and 2016 in relation to the online distribution of life insurance products and online food delivery, which shook up traditional business models. The CCCS has also spearheaded the launch of the Regional Handbook on E-Commerce and Competition in ASEAN[2] 2017 (the ASEAN Handbook)[3] as a toolkit as ASEAN Member States seek to identify and address potential challenges to competition law enforcement relating to e-commerce.

The key issues that the CCCS has noted in e-commerce and digital markets, thus far, include network effects, market tipping, the rise of big data as a source of market power, and the presence of multisided markets and the associated difficulties in applying the standard SSNIP (small but significant non-transient increase in price) test used in defining the relevant market for purposes of a competition assessment. Activities in the e-commerce and digital landscape are subject to all three prohibitions under the Competition Act (Cap. 50B) (the Act), specifically, prohibitions on:

  • agreements that prevent, restrict or distort competition (under section 34 of the Act);
  • the abuse of a dominant position (under section 47 of the Act); and
  • mergers or anticipated mergers that may result in a substantial lessening of competition (under section 54 of the Act).

These issues will be discussed in greater detail within this article.

The CCCS’s close scrutiny of e-commerce and the digital landscape is likely to continue, not only in enforcement, but also through softer approaches in market studies that are similarly impactful on industry players. The CCCS has recently announced in April 2018 that it will be conducting market studies into the online travel booking sector and the issue of data portability.

New challenges associated with e-commerce and the digital economy

The CCCS’s level of interest in e-commerce and the digital landscape is not surprising. Within South-east Asia, e-commerce markets have grown significantly and online shopping is set to grow from US$37.7 billion in 2017 to US$64.8 billion in 2021 in the six biggest economies in South-east Asia.[4] Singapore’s online share of total retail sales has been estimated to be 5.4 per cent, the highest among South-east Asia’s five top economies.[5]

In his welcome address at a CCCS conference with the Singapore Academy of Law in 2017, themed ‘New Approaches for a New Economy’, Mr Aubeck Kam, Chairman of the CCCS, commented that the one big question governments and competition authorities face is whether existing regulatory frameworks and models continue to hold in the face of technological disruption. General competition law and policy principles must be sufficiently flexible to remain relevant amid new challenges, as competition authorities rely on them rather than sector-specific policies.[6]

At the International Competition Network Annual Conference hosted by the CCCS in Singapore in 2016, three dangers with disruptive innovations were highlighted:[7]

  • the danger of insufficiently assessing the impact of policies on market competition;
  • the danger of insufficient data or studies on disruptive innovations; and
  • the danger of succumbing to pressures to maintain the status quo, rather than allow disruptive innovations to play themselves out.

The CCCS considers that in order to fully realise the benefits from e-commerce, it is important that competition is not impaired by any form of unilateral or coordinated conduct by companies active in e-commerce. In particular, the rise of e-commerce has resulted in the following challenges for competition regulators:

  • Definition of the relevant market. Multisided markets create difficulties in applying the standard SSNIP test to define a market.
  • Horizontal collusion. E-commerce has increased price transparency in markets, and digital tools that automatically monitor competitors’ prices have made it easier for firms to engage in collusive behaviour.
  • Unilateral conduct. Big data can be a source of market power.
  • Vertical restraints. The use of vertical restraints is particularly prevalent in e-commerce markets due to manufacturers’ concerns that online retailers may free-ride on the services provided by their brick-and-mortar counterparts.
  • Role of dynamic competition. Players outside of what may be considered the relevant market can still impose a competitive constraint on active market players.

The CCCS recognised these challenges early on, and it has been extremely proactive in ensuring that it stays on top of new developments in the e-commerce sector, ensuring that it has the necessary tools to detect and deter any possible harm to competition in markets in Singapore that emerges from the use of new technologies.

To this end, the CCCS has since 2015 undertaken several key studies in the e-commerce sector to better understand market practices, detect anticompetitive behaviour and propose policies to maintain level playing fields. Its findings have been published in the following:

  • the ASEAN Handbook;[8]
  • CCCS Occasional Paper ‘Data: Engine for Growth – Implications for Competition Law, Personal Data Protection, and Intellectual Property Rights’ published on 16 August 2017;[9] and
  • CCCS Occasional Paper ‘E-Commerce in Singapore – How it affects the nature of competition and what it means for competition policy’ published on 2 December 2015 on the back of DotEcon’ Ecommerce final report published on October 2015.[10]

These papers and the handbook serve to provide useful insights into the CCCS’s likely approach in dealing with the above challenges, in addition to the CCCS’s published cases in the e-commerce sector.

Definition of the relevant market

The ASEAN Handbook refers to the rise of e-commerce and the consequential emergence of many new multisided online markets such as online marketplaces (e.g., Carousell and Zalora) and price comparison websites. These multisided markets require the participation of two or more distinct groups of customers, who value each other’s participation on the same platform, in order to generate economic value. Multisided markets are also prone to strong network effects by which the value of the platform increases with an increased volume of users or participants.

Defining the relevant market may take on additional complexities due to the multiple different roles played by participants in the market. For instance, an e-commerce market provider may offer platform services but may also sell directly on its own platform (competing with third party sellers). This raises the question of how the relevant market should be defined in relation to that e-commerce market provider.[11]

The presence of externalities between different sides of markets also makes the standard analytical framework, founded on assumptions from single-sided markets, ill-suited to investigating alleged anticompetitive conduct in relation to multisided markets.[12] An increase in prices on one side of the market may potentially be offset by benefits to the other side of the market.[13] Therefore, it is important to consider the interrelationships between the different sides of the market in assessing the potential harm to competition, as highlighted within the ASEAN Handbook.[14]

The presence of strong network effects in multisided markets also means that the market is prone to ‘tipping’ – a phenomenon whereby the most successful online platform is rewarded as the market tips in its favour, making it difficult or even impossible for new entrants to compete against the incumbent.[15] The incumbent may then further leverage on its existing market power to foreclose competition in adjacent markets.[16] These concerns may, however, be alleviated by the phenomenon of ‘multi-homing’, in which consumers use many alternative online platforms and products at one time.[17]

Horizontal collusion

The ASEAN Handbook states that while existing competition policy and law is sufficient to identify and investigate this anticompetitive conduct, it recommends that competition authorities develop the necessary resources and expertise to investigate the nature of price algorithms and their functions[18] In particular, it recommends paying close attention to technological developments in price-setting algorithms because of concerns that those technologies may become more sophisticated and ‘self-learn’ to engage in ‘robo-collusion’ without any human direction.[19] In such a scenario, legal clarity would be required on difficult issues such as determining where the liability should fall.

In the CCCS Occasional Paper ‘Data: Engine for Growth – Implications for Competition Law, Personal Data Protection, and Intellectual Property Rights’, the CCCS paid specific focus to the increased price transparency of digital markets and the development of digital tools such as pricing algorithms that automatically monitor and match the prices of competitors, which have made it easier for firms to engage in collusive behaviour, tacitly or otherwise. Those algorithms also make it easier for cartels to detect and punish cartel deviations. This could result in consumers paying higher prices and dilute the benefits of searching for competitive prices online.[20]

The CCCS also noted the possibility of collusion via the hub-and-spoke model when multiple firms in a market outsource their pricing functions to the same third party using an automatic pricing algorithm. In such a scenario, the outsourced firm may seek to maximise industry profits as a whole (as a cartel would) as opposed to each firms’ own profits in a more competitive situation. The CCCS made observations, in the CCCS Occasional Paper ‘Data: Engine for Growth – Implications for Competition Law, Personal Data Protection, and Intellectual Property Rights’, on the investigations in the European Union (EU) into hub-and-spoke collusions in the e-commerce sphere.[21]

Unilateral conduct

The rise of e-commerce and the advent of the digital economy has also made it easier for businesses to collect huge quantities of data on consumers, including their purchasing habits and preferences. One key issue that arises is therefore whether such data, which potentially allows businesses to gain a competitive edge over its competitors, can be considered a source of market power that a dominant player may abuse, for example through refusing competitors’ access to such critical data or through tying access to its data with other ancillary services such as analytics services to leverage on its market power in one market into another.

The ASEAN Handbook highlights two key factors that should be considered when assessing market power in data-driven industries: whether the data can be replicated under reasonable conditions by competitors; and whether the use of the data is likely to result in a significant competitive advantage.[22] This would require examining whether competitors may access the data through substitute sources and whether there are legal barriers to the collection of the data.[23] Competition regulators should also consider whether the market dynamics are such that the data is transient in nature and useful for a very limited amount of time.[24]

Further, it is also necessary to assess the unique aspects of data-driven industries.[25] For instance, the presence of strong network effects may reinforce the importance of access to critical data and increase the barriers to entry and expansion for smaller firms. This would have to be taken into account when the competition authority is examining the minimum level of scale that smaller firms have to achieve to be able to enter the market or to compete effectively with the incumbent and whether this minimum level is achievable.[26]

Vertical restraints

Vertical restraints are agreements between firms at different levels of the supply and distribution chain. The use of such restraints is particularly prevalent in e-commerce markets due to manufacturers’ concerns that online retailers may free-ride on the services provided by their brick-and-mortar counterparts.[27] For instance, consumers may free-ride on the pre-sale services in a brick-and-mortar clothing store, by trying on clothes to choose what suits them best, only to purchase the product online at a cheaper price. Vertical restraints are thus commonly used to address such free-rider problems, for instance, the manufacturer may choose to allow only retailers who offer a certain level of pre– or post-sales service to sell their products.

Vertical restraints are generally considered by competition authorities around the world to be a benign business practice.[28] In Singapore, vertical restraints are excluded under the Third Schedule of the Act from section 34 of the Act, which prohibits agreements that appreciably restrict competition. The rationale for this approach lies in the general consensus that the majority of vertical agreements have a net pro-competitive effect and bring about certain benefits and efficiencies such as brand protection, encouraging relationship-specific investments and the avoidance of double marginalisation.[29]

However, vertical restraints may have anticompetitive effects. Some common vertical restraints in the e-commerce context include resale price maintenance (RPM) clauses, geo-blocking, most favoured nation (MFN) clauses and exclusive purchase restrictions.

Resale price maintenance

RPM clauses consist of agreements or concerted practices which have as their direct or indirect object the establishment of a fixed or minimum resale price or a fixed or minimum price level to be observed by the buyer.[30] An example of a RPM clause would be the express setting of price floors in a contract between a manufacturer and a retailer.

The ASEAN Handbook states that RPM clauses are generally regarded as likely to be harmful to consumers and are deemed as ‘hardcore restrictions’.[31] In January 2016, Lego was fined €130,000 by the German competition authorities for threatening to punish retailers that deviated from their recommended prices with the removal of discounts on wholesale prices.[32] While a distinction is drawn between RPM clauses and a recommended retail price (RRP) that simply recommends a minimum resale price and is typically not deemed anticompetitive by competition authorities, attempts to strictly enforce an RRP are likely to be regarded as a hardcore restriction akin to that of an RPM.[33]

Geo-blocking and digital parallel imports

Geo-blocking – the practice of preventing online customers from accessing and purchasing products or services from a website based in another state – is also a relatively common feature in e-commerce markets. The CCCS’s Chief Executive, Mr Toh Han Li, cited the example of Netflix in his opening remarks at a seminar with the Intellectual Property Office of Singapore in 2016. He said that when Netflix was first launched in Singapore in 2016, a number of subscribers had decried the relatively limited offerings on Netflix Singapore compared with the programmes offered in other jurisdictions such as the United States.[34] Some viewers in Singapore were eventually able to bypass these geo-blocks and access the programmes offered by US Netflix by using virtual private network technology, with no content restrictions. He then observed that one key issue for consideration is whether the bypassing of geo-blocks through digital parallel imports constitutes an infringement of copyright that should be restricted.[35] On the one hand, it may be argued that such digital parallel imports must be restricted to respect the licensing agreements of content distributors as protected by IP laws. However, from a competition law perspective, it is arguable that there should be a limit to the exercise of such exclusive rights so as to grant consumers access to content that would otherwise not be legitimately available.

Most favoured nation

Another common form of vertical restraint used in e-commerce and digital markets are MFN clauses, which are contractual provisions in which a seller (or licensor) agrees to give the buyer (or licensee) the best terms it makes available to any other buyer (or licensee). A wide MFN clause will thus ensure that the buyer’s competitors will not receive more favourable terms and be able to offer the product at a lower price. MFN clauses pose a particular challenge to competition authorities as they have both pro-competitive and anticompetitive effects. For instance, while MFNs potentially restrict intra-brand competition and can facilitate collusion between sellers in the market by enforcing uniform prices, these clauses also help overcome free-rider problems, reduce search costs for consumers and reduce price discrimination.[36]

In its CCCS Occasional Paper ‘Anything wrong with asking for the best price?’, the CCCS referred to the investigation by the United Kingdom Office of Fair Trading (OFT) (a predecessor to the Competition and Markets Authority) into a complaint raised by a small online travel agency about retail MFN clauses between, Expedia and the Intercontinental Hotel Group (IHG). The travel agency argued that the MFN clauses had adversely affected its ability to compete by reducing its own commissions to allow hotels to offer discounted hotel rooms via its platform.[37] The OFT subsequently issued a statement of objections against and Expedia’s separate discount restriction arrangements with IHG, which restricted their ability to offer discounts off headline room rates.[38] According to the OFT, the anticompetitive effect of such discounting restrictions was exacerbated by the use of MFN clauses.[39] All three parties subsequently offered commitments, including commitments not to enter or enforce any MFN clauses in respect of reductions off headline room rates. The commitments were subsequently struck down by the UK Competition Appeal Tribunal on the basis that the OFT had failed to consider objections raised by the appellant, which operated a price comparison or meta-search site for flights, hotel rooms and car hire, and the possible impact on price transparency of an obvious and clear restriction on disclosure of price information.[40]

The CCCS observed in the same paper that the European Commission (EC) had considered that retail price MFN clauses between five major publishers and Apple had created strong incentives for each publisher to convert other retailers, like Amazon, to the agency model with the same key terms.[41] Thus, the MFN clauses had acted as a ‘joint commitment device’ that facilitated the joint switch of the sale of e-books from a wholesale model (where the retailer determines retail prices) to a new agency model (where the publisher determines retail prices and earns higher mark ups).[42] The EC was of the view that this amounted to a concerted practice between the five publishers and Apple.[43] In the final commitments accepted by the EC, the publishers and Apple agreed to restraints that included a ban on retail price MFN clauses.[44]

Notably, competition authorities around the world have not adopted a uniform stance on the use of MFN clauses. In view of these challenges, the ASEAN Handbook recommends a case-by-case approach weighing up the pro-competitive and anticompetitive effects of the MFN clause depending on the market structure, the type of MFN clause used, and the characteristics of the product market and of its buyers and sellers.

Exclusive purchasing

Exclusive purchase restrictions that prevent a customer from purchasing a particular product or group of products from any other alternative supplier are also common in the e-commerce sphere. Like MFN clauses, exclusive purchasing restrictions can have both pro-competitive and anticompetitive effects. An exclusive purchasing restriction helps overcome the hold-up problem[45] but may potentially lead to market foreclosure and restrict inter-brand competition. The ASEAN Handbook recommends that a case-by-case approach is appropriate in relation to such restraints. In such assessments, the positions of both the retailer selling and the manufacturer producing the good are highly important. If either is in a position of dominance, the practice is highly likely to be anticompetitive. By contrast, if neither the retailer nor the manufacturer is in a position of market power, significant anticompetitive effects are less likely.[46]

Role of dynamic competition

The CCCS recognises the danger of succumbing to pressures to maintain the status quo, rather than allowing disruptive innovations to play themselves out. The ASEAN Handbook states that within the e-commerce sphere, dynamic competition plays an extremely important role. Given the relatively low barriers to entry in the e-commerce sphere, the entry of competing players from neighbouring markets is a possibility that competition authorities take into account in their competitive assessment.[47]

Accordingly, even in mergers involving firms operating in seemingly unrelated markets, there is potential harm to dynamic competition through the removal of a potential future entrant in a given market. Such mergers may not be captured under existing merger notification policy and it may be necessary for competition authorities to consider if their existing merger notification thresholds are able to capture these potentially problematic mergers.[48] This also means that competition authorities must look beyond static changes in market shares and consider how long-term incentives to compete, for example, through innovation, are affected in their assessment of the merger.[49]

Similarly, while the potential loss of dynamic competition is a factor that competition authorities must take into consideration, competition authorities should also factor in potential future dynamic competition that may serve to discipline the merged entity in the form of maverick firms.[50] In particular, given the dynamic nature of e-commerce markets, gains in market power may be transient and excessive interventions by competition authorities may risk stifling innovation and investments in the long run. Accordingly, any intervention in the market should be targeted, balancing potential competition concerns with the risks of creating market distortions.[51] This was highlighted by the CCCS Chairman, Mr Aubeck Kam, in his welcome remarks at the International Competition Network’s Annual Conference 2016, where he cautioned that while regulators must protect the public interest, they must also ensure that the business environment is not rendered unnecessarily restrictive as a result.[52]

Recent enforcement efforts by the CCCS in the e-commerce space

The CCCS’s approach towards dealing with the new challenges associated with e-commerce and the advent of the digital economy is also reflected in the enforcement actions that it has taken against alleged anticompetitive conduct in the e-commerce sphere in recent years.

Jobstreet/Seek Asia

On 20 February 2014, the CCCS was notified of a proposed acquisition of 100 per cent of the online employment business of JobStreet by Seek Asia Investments Pte Ltd (Seek Asia Investments).

As the acquisition involved the potential merger of the recruitment platforms and jobseeker databases operated by JobsDB Singapore and JobStreet Singapore, the CCCS was concerned that there would be a substantial lessening of competition in the market for the supply of online recruitment advertising services. This was because quality jobseeker databases take time to be developed and data on jobseekers cannot be collected overnight.[53] Accordingly, new entrants would have to incur significant marketing and advertising expenditure to enter and compete in the relevant market.[54] The CCCS was also of the opinion that the quality of jobseeker data on alternative job portals did not have the same reach and depth as the merged entity would have.[55] The strong network effects within the market would further reinforce the market power of the merged entity.[56]

The CCCS recognised at the same time, however, that there were countervailing factors that would be likely to constrain sufficiently the merged entity in the short term from exercising market power by raising prices. For instance, barriers to entry and expansion into the online recruitment services market are not so high as to constrain significantly new entry and expansion.[57] Further, jobseekers, employers and recruiters have the ability to multi-home, which would reduce any competitive advantage gained by SEEK post-merger.[58] Notably, the CCCS also recognised that the online recruitment advertising services market in Singapore is characterised by some degree of innovation and competition that would also act as a competitive constraint on parties post-merger.[59] However, the CCCS was ultimately unable to conclude that these features were likely to constrain sufficiently the merged entity at the end of the Phase 1 review.[60] Accordingly, the merger went into a Phase 2 review and was only cleared upon the offering of commitments by Seek Asia to address the CCCS’s concerns.[61]

The commitments proposed by SEEK Ltd and SEEK Asia included commitments to refrain from implementing exclusive arrangements with employers and recruiters so as to preserve multi-homing, namely the ability to use more than one online recruitment advertising platform.[62] This would ensure that competing platforms have room to enter and expand, preserving competition in the online recruitment advertising services market.[63] SEEK Ltd and SEEK Asia also committed to cap its prices at current prices to address the concern that the merged entity may be able to increase prices post-merger.[64] Being mindful of the importance of dynamic competition and innovation in the market for such online service platforms, the CCCS agreed to these commitments being in place for a relatively short span of time – three years.[65]

Investigation into online food delivery services

In 2016, the CCCS, acting on a complaint, investigated alleged anticompetitive practices of online food delivery services.[66] The investigations revealed that the online food delivery services had entered into exclusive agreements with certain restaurants, preventing those restaurants from using other providers.

However, the CCCS ceased its investigation as it noted that the market was still extremely competitive and dynamic, with the market shares of industry players changing constantly. Therefore, the practice of using exclusive agreements as a means of gaining market share had not harmed competition within the market for online food delivery services, but the CCCS will continue to monitor closely the market as such exclusive agreements can be problematic in future.[67]

Financial advisers and the life insurance market

On 17 March 2016, the CCCS issued an infringement decision against 10 financial advisory firms in Singapore that were found to have pressured a competitor into removing an innovative, low-cost life insurance offer on a platform website.[68] The CCCS considered that without this collective pressure, the discount (through commission rebates) would have put the competitors under competitive pressure to follow suit and provide similar offers to consumers.[69] The disruption to the financial advisory industry would therefore have led to lower prices for consumers and improved outcomes for consumers.[70] Accordingly, the 10 financial advisory firms that colluded to pressure the discounting firm into removing its offer were found to have infringed section 34 of the Act, which prohibits horizontal collusion.

Grab/Uber merger

On 24 September 2018, the CCCS issued an infringement decision against Grab and Uber in relation to the sale of Uber’s Southeast Asian business to Grab in return for a 27.5 per cent stake in Grab. The CCCS found that the transaction resulted in a substantial lessening of competition in the market for two-sided platforms matching drivers and riders for the provision of booked chauffeured point-to-point transport services (CPPT platform services) in Singapore (platform market) and infringed section 54 of the Act. Accordingly, the CCCS directed a set of remedies and imposed financial penalties upon Grab amounting to S$6,419,647.

The remedies imposed by the CCCS were substantially similar to the interim measures directions that it had imposed on Grab and Uber earlier in 13 April 2018 in response to Grab’s announcement of the acquisition. These included the removal of exclusivity obligations on drivers and taxi fleets so as to preserve multi-homing, allowing drivers and taxi fleets to drive for multiple platforms.[71] The parties were also required to preserve the pre-transaction pricing and commission levels so as to protect the interests of riders and drivers against excessive price surges and increases in commissions, while not affecting Grab’s flexibility to apply dynamic pricing under normal demand and supply conditions, and not restricting the amount of rider promotions and driver incentives that Grab wished to offer.[72] A further requirement was that Uber had to sell the vehicles of Lion City Rentals to any potential competitor who made a reasonable offer based on fair market value and could not sell these vehicles to Grab without the CCCS’s prior approval. According to the CCCS, this would prevent Grab and Uber from absorbing or hoarding Lion City Rentals vehicles to inhibit the access to a vehicle fleet by a new competitor.[73]

The CCCS took the view that the remedies were necessary to lessen the impact of the transaction on drivers and riders, to open up the market, and to level the playing field for new entrants.[74] In particular, the CCCS was concerned that the two-sided nature of the platform market would give rise to strong indirect network effects and increase the propensity for market tipping.[75] This would create high barriers to entry that would be exacerbated by exclusivity agreements between the drivers and the merged entity.[76]

The Grab/Uber merger also raises interesting issues such as whether Grab and Uber should be considered simply as platforms for CPPT services or whether they should be considered to be competing in the wider market for transportation services.

Market study on the online travel booking sector

The CCCS announced in April 2018 that it will be conducting a market study into the online travel booking sector, to take a closer look at whether the market is functioning well.[77] As Singaporeans are increasingly well travelled and with the rise of the digital economy, online travel booking platforms have become a key channel for consumers to search for and purchase travel-related products, including air tickets and accommodation, rather than purchasing directly from the service providers, for example, the hotels and airlines.[78]

The CCCS’s market study will focus on understanding the industry landscape relating to both the provision of flight tickets and hotel accommodation in Singapore.[79] This will help the CCCS to understand how commercial practices and arrangements in the online travel sector affects competition and consumers in Singapore.[80] In particular, the CCCS intends to look into the types of commercial arrangements entered into between third-party online travel booking platforms and service providers, including how such commercial arrangements are negotiated and applied in Singapore; and how online travel booking platforms and service providers compete with each other.[81]

Data portability

The CCCS also announced a second key initiative in April 2018 for a joint study with the Personal Data Protection Commission to study consumer protection, competition and personal data protection issues that could arise if a data portability requirement is introduced in Singapore.[82]

Internationally, several jurisdictions have provided, or are considering providing for a right to data portability, which enables individual consumers to request for the personal data and other data that they have provided to a service provider, in a format that is structured, commonly used and machine-readable.[83] This empowers consumers and allows them more control over their personal data.[84]

It enhances the ability of consumers to choose between service providers and, having made that choice, facilitates switching between service providers, as they do not have to provide their details each time they switch providers.[85]

In addition, the right to data portability could extend to requiring service providers to transmit the personal data to another service provider without hindrance, if it is technically feasible.[86] The ease of switching will in turn foster competition between service providers and also encourage them to innovate and develop new services, resulting in more choices for consumers.[87]

Looking ahead

It is evident that the CCCS has placed considerable effort into understanding the challenges associated with e-commerce and digital markets. The CCCS’s deep understanding of the issues associated with e-commerce markets is also reflected in the sophisticated manner in which the CCCS has dealt with alleged anticompetitive conduct in the e-commerce markets thus far.

The CCCS has also consistently concluded from its various research studies that its current regulatory toolbox is sufficient to deal with the new challenges associated with the rise of e-commerce and the digital economy. It remains to be seen if this will continue to hold true given the fast pace of developments in digital technology.

Nonetheless, it is clear that ensuring fair and free competition in e-commerce and digital markets will remain an important policy objective for the CCCS, and that developments in the e-commerce field will continue to be closely scrutinised.


[1] Daren Shiau and Elsa Chen are partners at Allen & Gledhill LLP, and the co-heads of the firm’s competition and antitrust practice. Daren is also the co-head of the firm’s corporate and commercial department, and Elsa is also the co-head of the firm’s public policy practice.

[2] The Association of South-east Asian Nations.

[3] The handbook is prepared by PricewaterhouseCoopers and commissioned by the CCCS with input from the CCCS, the competition authorities of Indonesia, Malaysia, the Philippines, and Vietnam via questionnaires in April 2017 as well as interviews with experts from across the PricewaterhouseCoopers network specialising in industries disrupted by e-commerce.

[5] ibid.

[11] ibid.

[12] Handbook on E-Commerce and Competition in ASEAN 2017 at page 5.

[13] ibid. at paragraph 6.2.17.

[14] ibid. at page 5.

[15] CCCS Occasional Paper ‘E-Commerce in Singapore – How it affects the nature of competition and what it means for competition policy’ published on 2 December 2015 at page 14.

[16] ibid.

[17] ibid. at page 15.

[18] Handbook on E-Commerce and Competition in ASEAN 2017 at page 6.

[19] ibid. at page 7.

[20] See No. CR 15-00201 WHO. United States of America v. David Topkins. United States District Court of the Northern District of California in San Francisco (30 April 2015) for a recent example of algorithm-enhanced price fixing, which the CCCS discusses. The United States Department of Justice (DOJ) successful prosecuted David Topkins – who, together with several co-conspirators, entered into an agreement to fix the prices of wall posters sold on Amazon Marketplace. Topkins then developed pricing algorithms that were specifically coded to set the prices of the posters in accordance with the agreement. For his conduct, Topkins was charged under section 1 of the Sherman Act and agreed to pay a US$20,000 criminal fine. See also CCCS Occasional Paper ‘Data: Engine for Growth – Implications for Competition Law, Personal Data Protection, and Intellectual Property Rights’ at paragraph 154

[21] Case C-74/14, Eturas and others (21 January 2016). The Lithuanian Competition Council alleged that Eturas, an online travel booking platform, and 30 travel agencies using its platform had co-ordinated the discount rates applicable on bookings made via the platform. There was no evidence of any direct communications between the parties and the council relied on an email sent by Eturas. Its findings were overturned by the European Court of Justice (CJEU) on the basis that the mere receipt of the email was insufficient to prove that the travel agencies were aware of its unlawful content. However, the CJEU held that this scenario would constitute a concerted practice under Article 101 of the Treaty on the Functioning of the EU (the equivalent of the section 34 prohibition) if it could be proven that the travel agencies were aware of the content of the email and did not publicly distance themselves from it. See also Handbook on E-Commerce and Competition in ASEAN 2017 at paragraph 8.3.3.

[22] CCCS Occasional Paper ‘Data: Engine for Growth – Implications for Competition Law, Personal Data Protection, and Intellectual Property Rights’ at paragraph 164.

[23] ibid. at paragraph 173 to 174.

[24] ibid. at paragraph 177.

[25] ibid. at paragraph 165.

[26] ibid. at paragraph 169.

[27] Handbook on E-Commerce and Competition in ASEAN 2017 at paragraph 7.2.15.

[28] ibid. at paragraph 7.2.1.

[29] Double marginalisation arises when firms in a vertical relationship both have market power (i.e., they can both set prices above marginal cost).

[30] Handbook on E-Commerce and Competition in ASEAN 2017 at paragraph 7.4.1.

[31] ibid. at paragraph 7.4.4.

[32] ibid. at page 65.

[33] ibid. at paragraph 7.4.3.

[35] ibid.

[36] Handbook on E-Commerce and Competition in ASEAN 2017 at paragraph 7.8.3.

[37] CCCS Occasional Paper ‘Anything wrong with asking for the best price?’ at paragraph 30. Available at

[38] Skyscanner Ltd v Competition and Markets Authority [2014] CAT 16 at paragraph 12.

[39] ibid. at paragraph 14.

[40] CCCS Occasional Paper ‘Anything wrong with asking for the best price?’ at paragraph 31.

[41] ibid. at paragraph 33.

[42] ibid.

[43] ibid.

[44] ibid.

[45] A hold-up problem arises when parties refuse to deal with each other because they believe it will increase the other party’s bargaining power. Typically, one party makes a non-contractual commitment to a relationship with the other party and the other party can ‘hold up’ the former for the value of that commitment.

[46] Handbook on E-Commerce and Competition in ASEAN 2017 at paragraph 7.10.2.

[47] ibid. at paragraph 10.2.3.

[48] ibid. at paragraphs 10.2.3 and 10.2.4.

[49] ibid. at paragraphs 10.3.1.

[50] ibid. at paragraphs 10.3.3.

[51] CCCS Occasional Paper ‘E-Commerce in Singapore – How it affects the nature of competition and what it means for competition policy’ published on 2 December 2015 at page 15.

[53] CCCS Occasional Paper ‘E-Commerce in Singapore – How it affects the nature of competition and what it means for competition policy’ published on 2 December 2015 at paragraph 203.

[54] ibid.

[55] CCCS Occasional Paper ‘E-Commerce in Singapore – How it affects the nature of competition and what it means for competition policy’ published on 2 December 2015 at paragraph 203.

[56] ibid.

[58] ibid.

[59] ibid.

[60] ibid.

[61] ibid.

[62] ibid.

[63] ibid. at paragraph 171.

[65] Handbook on E-Commerce and Competition in ASEAN 2017 at paragraph 10.5.4.

[67] ibid.

[68] CCS 500/003/13 Infringement of the section 34 prohibition in relation to the distribution of individual life insurance products in Singapore. See also Handbook on E-Commerce and Competition in ASEAN 2017 at paragraph 8.3.4.

[69] ibid.

[70] ibid.

[72] ibid.

[73] ibid.

[74] ibid.

[75] Market tipping is a phenomenon in which a single firm becomes sufficiently large that the market ‘tips’ in its favour, meaning that the firm captures a majority share of the market and its strong position is reinforced by network effects.

[78] ibid.

[79] ibid.

[80] ibid.

[81] ibid.

[82] ibid.

[83] ibid.

[84] ibid.

[85] ibid.

[86] ibid.

[87] ibid.

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