Singapore: Competition Commission

The Competition Commission of Singapore (CCS) celebrated its 10th anniversary in 2015. To commemorate this significant milestone in its corporate history, the CCS has published a commemorative book, titled 10 Years of Championing Growth and Choice, to record its first decade of accomplishment and capture its growth path. With 10 years of enforcement and advocacy experience under its belt, the CCS is ready to head towards greater heights. As we look back on our achievements, we also consider our priorities and challenges moving forward.

A new mission and vision

Competition is at the heart of Singapore’s efficient and open markets, enabling businesses to thrive through productivity and innovation. We strive to be the enabler in Singapore’s economic ecosystem through robust enforcement, active advocacy and fostering collaborative relationships with key stakeholders locally and overseas.

Our new mission is: ‘Making markets work well to create opportunities and choices for businesses and consumers in Singapore.’ Emphasis is placed on the benefits of our work – in terms of opportunities and choices – for businesses and consumers in Singapore, by ensuring markets work well. This mission also clarifies that when the CCS intervenes, its aim is to achieve a better market outcome for businesses and consumers.

Our new vision is: ‘A vibrant economy with well-functioning markets and innovative businesses.’ It sets out the results that the CCS hopes to achieve – a vibrant Singapore economy with markets that are characterised by good use of economic resources and businesses striving to be productive, innovative and responsive.

Rigorous enforcement

The CCS has, in 2015, cleared five mergers that spanned different industries, including manufacturing, transport and a landmark intervention in the health-care industry. This included the Boeing and SIAEC joint venture, Denka and Mitsui’s acquisition of DuPont’s global Neoprene Business, the merger between China CNR Corporation and CSR Corporation, Airbus Asia and SIA’s tie-up, as well as Daifuku’s acquisition of shares of BCS Group.

In March 2015, the CCS issued a provisional decision to block Parkway Holdings Ltd’s proposed acquisition of Radlink-Asia Pte Ltd. The decision was taken after extensive consultation with the merger parties, industry stakeholders and members of the public. The CCS has assessed that the tie-up would raise monopoly concerns in the market for the supply of radiopharmaceuticals, which would raise healthcare costs in the affected markets for molecular and diagnostic imaging services in Singapore. The parties eventually did not proceed with the merger and Radlink-Asia Pte Ltd has since found another buyer.

The 10-member Association of South East Asian Nations (ASEAN), which includes Singapore, has committed to an Open Skies policy and a Single Aviation Market. To this end, ASEAN has enjoyed significant growth in the airline industry in recent years. A previous study commissioned by the CCS on the Asian aviation market showed that this is a vibrant market that has seen increased entry and exit, at the same time generating alliances and joint venture agreements among airlines, of which 17 have been notified to the CCS to date. In 2015, the strategic alliance agreement between Cebu Pacific and Tigerair was cleared after the parties agreed to lessen the level of cooperation following competition concerns raised by the CCS on two routes between Singapore and the Philippines.

In 2015, the CCS accepted commitments following abuse of dominance investigations in the F&B and health-care sectors. In June, after Cordlife voluntarily removed various exclusive agreements it had with baby fair organisers and hospitals, the CCS ceased its investigation against them. The removal of the restrictions would allow competing cord blood banks to access baby fairs and hospitals as marketing channels, and this would help to increase the penetration rate of private cord blood banks in the growing cord blood banking industry as Singaporeans become more affluent and increasingly aware of the need for pre-emptive healthcare.

In October, the CCS also ceased its investigation against Asia Pacific Breweries (Singapore) Pte Ltd after they voluntarily committed to cease their outlet exclusivity practice. Many industry players welcomed this as they see the absence of outlet exclusivity as a positive development for the beer industry, in which the total retail sales in Singapore in 2014 were estimated to be 2.28 billion Singaporean dollars.

In the area of cartels, the CCS took action in the insurance industry when it issued a proposed infringement decision against 10 financial advisory companies for collectively pressurising a potential competitor to withdraw its novel offer of commission rebates on its products. This case is currently at the representation stage.

As 10 years have passed since the CCS was set up, we have embarked on an ongoing legislative and guideline review to ensure that the law and guidelines continue to be updated and future-ready. To this end, we have proposed changes to the guidelines that will make it easier for businesses, consumers and stakeholders to understand the various competition concepts. The streamlining and simplification of the various notification forms will save businesses both time and resources in providing information to the CCS during the notification process.

Having had the experience of handling two international cartel investigations, we are now well positioned to make our leniency programme even clearer and more efficient. The proposed introduction of the fast-track procedure would also provide an avenue for businesses that have been engaged in anticompetitive conduct to resolve their matters with the CCS in a shorter period of time.

Active advocacy

While enforcement of competition law constitutes a pivotal part of our work, it is equally important for us to advocate and prevent anticompetitive practices from happening in the first place. For that to materialise, there must be awareness and understanding of competition issues. The CCS will continue to step up its outreach effort to engage businesses and consumers and provide them with clear guidance on competition policy and law. In this regard, the CCS’s collaterals will be given a facelift and are expected to be rolled out by early 2016.

The CCS also continues with efforts to engage and advise government agencies on competition matters, and to conduct research market studies and research projects. The Policy and Markets (PM) division is currently reviewing the Competition Impact Assessment framework to help government agencies make policies that are competition-friendly. In 2015, we have seen an almost threefold increase in the number of competition advisories since the PM division was set up in November 2013. This indicates greater awareness among government agencies that competition plays an important role alongside other policy considerations in their policy making.

One example is in the rise of independent mobile taxi-booking apps, where the CCS worked closely with the Land Transport Authority (LTA) on the proposed regulation of third-party taxi booking apps, to ensure a competitive landscape for the industry while balancing other considerations such as safeguarding commuters’ interests.

For its work in promoting cooperation with the LTA, the CCS was named a winner at the 2014 Competition Advocacy Contest, organised by the International Competition Network (ICN) and the World Bank Group. The annual contest aims to raise awareness of the key role of competition authorities in advocating and promoting competition within their countries and to showcase their successful advocacy stories.

Facilitating regional competition cooperation and development

2015 was a landmark year for ASEAN as it drove towards the establishment of the ASEAN Economic Community (AEC) by the end of the year, which sees the formation of a single market and production base. In the area of competition law, ASEAN member states have ramped up the pace to enact competition laws in their respective countries. Brunei, Myanmar and the Philippines passed competition laws in 2015, joining Indonesia, Malaysia, Singapore, Thailand and Vietnam. Cambodia and Laos are working to have their competition law legislated by the end of 2015.

The CCS welcomes these developments in ASEAN and sees the importance of strengthening competition cooperation and working towards having a coherent and effective regional competition architecture so as to facilitate an integrated regional single market. Noteworthy initiatives include partnering with the OECD Korea Policy Centre to bring in high-level experts in advocacy (including several heads and former heads of competition authorities) to conduct a three-day seminar on advocacy, and partnering with the US Federal Trade Commission and US Department of Commerce to conduct a five-day training programme on procedural fairness. We also contributed to the region’s development by sharing its experiences at various ASEAN Experts Group on Competition (AEGC) training events.

Regional Free Trade Agreements are an important part of competition architecture. In 2015, the Trans-Pacific Partnership (TPP) was concluded. It involves 12 economies – the United States, Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, and accounts for 793 million people, with a combined GDP of US$28 trillion. The CCS is pleased to be involved in negotiations of the TPP’s competition chapter that is, to date, the most comprehensive competition policy chapter that has been concluded in all the FTAs that Singapore has signed with other economic partners.

The Regional Comprehensive Economic Partnership (RCEP) involves 10 ASEAN member states and six of ASEAN’s dialogue partners – Australia, China, India, Japan, New Zealand and South Korea – accounting for a collective market of more than 3 billion people and a combined GDP of about US$20 trillion. As chair for the Working Group on Competition, we have made good progress by concluding negotiations on certain substantive provisions.

Moving forward

For 2016 and beyond, we will further anchor competition policy and law as the heart of Singapore’s economic policy and create a vibrant and dynamic economy with well-functioning markets and innovative businesses. One area of focus will be e-commerce. E-commerce changes the competition dynamics in and across markets and creates abundant opportunities across geographic boundaries. To this end, our competition regime must be able to manage and promote a vibrant e-commerce playing field.

On the regional front, the establishment of the AEC in 2015 is but the beginning of better things to come. As host of the ICN’s Annual Conference in 2016, this will be an important signal to the world that ASEAN is ready to take on the vision of an integrated single market, supported by a coherent regional competition architecture. The competition architecture needs to overcome impediments to the ASEAN single market including non-tariff barriers and limits to foreign investment.

The special project for the 2016 ICN Annual Conference is ‘Disruptive Innovations and Government Advocacy.’ Singapore has chosen this topic as we are of the view that it is timely for competition authorities to be up to date on the dynamic and exciting developments in areas such as e-commerce and the sharing economy, so that we can all work with governments to make markets work better for businesses and consumers in accommodating these new business models.We look forward to the rich sharing by the competition authorities in this regard.

About the author

Han Li Toh is the chief executive and a commissioner of the Competition Commission of Singapore (CCS). He was previously the assistant chief executive (legal and enforcement).

He has served as a justices’ law clerk to the chief justice and Court of Appeal of Singapore; deputy public prosecutor and state counsel in the Attorney-General’s Chambers; senior assistant registrar of the Supreme Court; registrar and district judge of the State Courts; and assistant chief executive (legal and enforcement) in the CCS. He serves on several tribunals, including the Military Court of Appeal, the Monetary Authority of Singapore’s Appeals Advisory Panel and the Copyright Tribunal.

Mr Toh read law at Cambridge University, obtained his masters of laws from the University of Chicago and holds a masters in public management from the Lee Kuan Yew School of Public Policy. He attended the Stanford Executive Programme at the Graduate School of Business, Stanford University. He is admitted to practise law in Singapore, England and New York.