Singapore: from the enforcer
Max Loh Khum Wai
Sia Aik Kor
Questions and answers
How long is the head of agency’s term of office?
The Ministry of Trade and Industry appoints members to the Competition and Consumer Commission of Singapore (CCCS), including the chairman. Each term of office is no less than three years and no more than five years, and the ministry may reappoint CCCS members for a new term.
When is he or she due for reappointment?
The chairman was appointed for three years beginning 1 January 2021.
Which posts within the organisation are political appointments?
No positions within the agency are political appointments.
What is the agency’s annual budget?
The total approved operating budget for the 2021 fiscal year was approximately S$20.15 million.
How many staff are employed by the agency?
The CCCS has about 73 staff as at 1 October 2021.
To whom does the head of the agency report?
The chairman of the CCCS is appointed by the Ministry of Trade and Industry. The CCCS decides on cases independently. Appeals against the decisions of the CCCS go to an independent Competition Appeal Board.
For corporate accountability, the CCCS is required to submit a copy of its audited financial statements and an auditor report to the ministry for presentation to parliament.
Do any industry-specific regulators have competition powers?
Yes. Some sectors, such as energy, media and telecommunications, have jurisdictions over matters relating to competition in those sectors.
If so, how do these relate to your role?
When the Competition Act came into force, a number of sectors and activities were excluded from the act for two main reasons:
- public interests considerations (for example, national security, defence, to ensure security takes precedence over economic considerations); and
- sectors in transition from a monopoly to a liberalised market.
Sectoral regulators, with their greater domain knowledge and expertise, are deemed to be better placed to address and balance competition issues with other policy concerns using their own competition frameworks.
Where there are cross-sectoral competition issues, they will be dealt with by the CCCS in consultation with the relevant sectoral regulators.
Do politicians have any right to overrule or disregard the decisions of the authority?
Under the Competition Act, the decisions of the CCCS are independent and not subject to the scrutiny of politicians. Parties have the right to appeal against the CCCS’s decisions to an independently appointed Competition Appeal Board. They can also appeal against a decision of the Competition Appeal Board to the High Court and Court of Appeal on a point of law arising from a decision of the board, or from any decision of the board as to the amount of a financial penalty. There are also rights of private action provided for under the Competition Act.
Does the law allow non-competition aims to be considered when taking decisions?
In enforcing the Competition Act, the CCCS takes into consideration harm on the competitive process in a market caused by a particular conduct. However, the Competition Act also allows for exemptions or exclusions for certain practices and conduct based on public interest or policy considerations, net economic benefit or net efficiencies arguments.
Which body hears appeals against the agency’s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this?
Parties have the right to appeal against the CCCS’s decisions to the Competition Appeal Board (CAB). The CAB is an independent body comprising members appointed by the Minister for Trade and Industry. Parties can also appeal against a decision of the Competition Appeal Board to the High Court and subsequently to the Court of Appeal on a point of law, or as to the amount of a financial penalty. There are also rights of private action provided for under the Competition Act.
Has the authority ever blocked a proposed merger?
Yes. In 2018, the CCCS issued a statement of decision (provisional) to the parties, finding that the proposed acquisition was likely to result in the substantial lessening of competition in the market for the supply of marine water treatment chemicals in Singapore. The proposed transaction was subsequently abandoned by the parties, and the notification was withdrawn.
Also in 2018, the CCCS issued an infringement decision against two ride-hailing firms that merged and raised substantial competition concerns without first notifying and getting clearance from the CCCS. The CCCS first imposed interim measures directions on the parties to ensure that the market remained open and contestable while the CCCS investigated the merger. Eventually, an infringement decision, including directions to lessen the impact of the merger on drivers and riders as well as open up the ride hailing platform services market and level the playing field for new players, was issued against the parties as the transaction was found to have led to a substantial lessening of competition in the ride-hailing platform services in Singapore. The CCCS levied a total of S$13,001,702 in financial penalties on the parties.
Has the authority ever imposed conditions on a proposed merger?
Yes. In 2019, the CCCS conditionally approved the merger of two private clinical laboratories after accepting commitments from the merged entity. The conditions committed by the merged entity applies for four years and include: ensuring other competing labs have access to testing services supplied by the merged party on a fair, reasonable and non-discriminatory basis; allowing contracted customers to switch to other suppliers; allowing early termination of contracts without cause subject toa prior written notice and requiring the merged entity to maintain its prices for certain types of customers.
Has the authority conducted a Phase II investigation in any of its merger filings?
Has the authority ever pursued a company based outside your jurisdiction for a cartel offence?
An agreement which has as its object or effect the prevention, restriction or distortion of competition within Singapore is prohibited, even if the agreement is entered into outside Singapore or if a party to such agreement is outside Singapore. To date, the CCCS has pursued three cases involving global cartels. The most recent case took place in January 2018 when the CCCS issued an infringement decision against five capacitor manufacturers for engaging in price-fixing and the exchange of confidential sales, distribution and pricing information for aluminium electrolytic capacitors. Among the companies that were found to have infringed the Competition Act, one was a Malaysian company.
Do you operate a leniency programme? Whom should potential applicants contact?
The CCCS has a leniency programme as part of its enforcement strategy. It is targeted at businesses that have participated in cartel activities, but would nevertheless like to cease their cartel involvement and provide the CCCS with the evidence of the cartel activity. A successful leniency applicant that meets the conditions of the programme(including being the first one to come forward) may be granted immunity from financial penalties. Other applicants that do not qualify for total immunity may benefit from a reduction in financial penalties. In addition, the CCCS also operates a leniency plus programme that incentivises businesses that are co-operating with the CCCS in a cartel investigation in one market (the first market) to inform the CCCS about their participation in a completely separate cartel in another market (the second market). A successful applicant that is the first one to come forward may be granted immunity or up to 100 per cent reduction from financial penalties in relation to the cartel in the second market, and it will also be granted a reduction in the financial penalties, if any, imposed against it in the investigation in the cartel in the first market. Potential applicants can reach CCCS via the following methods:
- filling in the online form at https://www.cccs.gov.sg/approach-cccs/making-complaints/complaint-online-form;
- downloading and completing the CCCS leniency application form, and emailing the completed form together with the supporting documents to [email protected];
- completing the CCCS leniency application form and submitting it by post; or
- arranging to meet the CCCS in person, by calling our hotline to set up an appointment.
Is there a criminal enforcement track? If so, who is responsible for it?
Are there any plans to reform the competition law?
The CCCS continually reviews the Competition Act to ensure that it is relevant and up-to-date. Our most recently completed review was completed in May 2018, when the Competition (Amendment) Act came into effect. Among the main changes to the Act are: (i) changes to empower CCCS to accept legally binding and enforceable commitments for anti-competitive conduct relating to sections 34 and 47 prohibitions so as to address and resolve the competition concerns arising from the conduct; (ii) streamlining and simplification of the interview process by allowing CCCS to conduct general interviews during inspections and searches under section 64 and section 65 of the Act respectively; (iii) to provide more certainty to businesses and stakeholders by providing for confidential advice for anticipated mergers under the Act.
When did the last review of the law occur?
Do you have a separate economics team? If so please give details.
Economists are in the Business and Economics (BE) Division and the Policy and Markets (PM) Division.
The BE Division provides expert economics inputs and analysis to investigations and competition cases.
The PM Division works closely with other government agencies to engage and advise them on national competition matters. In addition, the PM Division conducts market studies and collaborates with academic and research institutions and think tanks on suitable areas of research on competition policy and law.
Has the authority conducted a dawn raid?
Has the authority imposed penalties on officers or directors of companies for offences committed by the company?
What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?
Not applicable. Singapore has a voluntary merger regime.
Are there any restrictions on minority investments?
In general, the CCCS considers that a merger is unlikely to reduce in a substantial lessening of competition (SLC) and hence is unlikely to investigate unless:
- the merged entity will have a market share of 40 per cent or more; or
- the merged entity will have a market share of between 20 and 40 per cent, and the post-merger combined market share of the largest firms (concentration ratio of 3) is 70 per cent or more.
These thresholds are only indicative, and if necessary, the CCCS can carry out an assessment to determine whether a merger will substantially lessen competition. In an SLC test, the CCCS will evaluate the prospects for competition in the future with and without the merger, and to consider efficiency arguments where available.
Does the authority conduct criminal investigations and prosecutions for cartel activity? If not, is there another authority in the country that does?
Singapore: from the enforcer's competition economists
Questions and answers
How many economists do you employ?
There are currently about 25 economists in the Competition and Consumer Commission of Singapore (CCCS). In addition, one Commission member is a professor of economics at Nanyang Technological University.
Do you have a separate economics unit, or ‘bureau’?
The Business and Economics (BE) Division and the Policy and Markets (PM) Division are staffed with economists. The BE Division provides expert economics inputs and analysis to competition and consumer cases, while the PM Division engages other government agencies closely and advises them on competition matters. In addition, the PM Division conducts market studies and collaborates with academic and research institutions and think tanks on research relating to competition and consumer protection policy, economics and law.
The CCCS does not consider economists as separate, independent advisers. Economists can be appointed to senior management positions. They also work together with lawyers and policy generalists to carry out investigation work, conduct market studies and to reach out to businesses, government bodies and other key stakeholders.
Do you have a chief economist?
The CCCS does not have such a post but does have the post of assistant chief executive of the Policy, Business and Economics Division. The assistant chief executive oversees the work of the BE Division and PM Division.
To whom does the chief economist report?
The assistant chief executive reports directly to the chief executive of the CCCS.
Does the chief economist have the power to hire his or her own staff?
The hiring of any economist is decided by an interview panel comprising:
- the chief executive;
- the assistant chief executive of the Policy, Business and Economics Division;
- senior director of the Business and Economics Division or the director of the Policy and Markets Division;
- the director of the Corporate Affairs Division; and
- any other management staff whom the chief executive may assign to be in the interview panel.
How many economists have a PhD in industrial economics?
Does the agency include a specialist economist on every case team? If not, why not?
Generally, every case team comprises personnel from the Legal and Enforcement Division and, depending on the nature of the case, economists from either the BE Division or the PM Division will be included to ensure professional inputs from both the legal and economic perspectives.
How much economics work is outsourced? What type of work is outsourced?
The CCCS hires external consultants as necessary, such as for a market study in an industry requiring specialised and technical expertise or to get an independent expert’s assessment of certain aspects of a competition or consumer case.