Singapore: Competition Commission

The Competition Commission of Singapore’s (CCS) commitment to make markets work well to create opportunities and choices for businesses and consumers in Singapore has driven us to achieve many significant milestones in 2017.

Rigorous enforcement

CCS reviewed four merger notifications across different industries, including motor vehicle manufacturing, container liner shipping services and semiconductors. CCS conditionally approved the merger of book distributors entering into an exclusive distribution agreement after accepting commitments from the merged entity. The merged entity committed to supply third-party retailers the full range of books by the publishers on a fair, reasonable and non-discriminatory basis during the period of exclusive distribution. CCS has also initiated more in-depth reviews of two proposed mergers, one between maritime products suppliers and another between optical products suppliers.1

CCS issued an infringement decision against three companies for their involvement in bid-rigging in electrical services and asset tagging tenders for the Singapore GP F1 night race. An infringement decision was also issued against five capacitor manufacturers involved in a global cartel where they exchanged confidential business information, as well as discussed and agreed on sales prices and price increases.

A Supplementary Proposed Infringement Decision (SPID)2 was issued against 13 fresh chicken distributors for engaging in anticompetitive agreements to coordinate the amount and timing of price increases, and agreeing not to compete for each other’s customers in the market for the supply of fresh chicken products in Singapore. The SPID was issued following further investigations, after new evidence involving allegations of fact and admissions were brought to the attention of CCS.

The Competition Appeal Board also dismissed with costs an appeal made by a financial adviser and upheld the financial penalty that CCS had imposed on the adviser for its involvement in pressuring a competitor to withdraw its offer of a competitive life insurance product.

Market studies

Three market studies were concluded in 2017 to better understand the markets concerned and the effects of the market features on competition in Singapore. The market inquiry into the supply of car parts has allowed CCS to raise its concerns with the major car dealers on their warranty terms and conditions that require non-warranty related servicing and repairs to be carried out at authorised workshops, in order for the car warranty to remain valid. The market inquiry focused on 11 major car dealers that distribute 19 car brands, that inclusive of parallel-imported cars, made up more than 90 per cent of the Singapore car population in 2016. All the major car dealers have agreed to make the relevant changes to their warranty terms to facilitate a more competitive market for car repairs and servicing, with more choices for car owners.

CCS released its findings from its inquiry into the retail petrol market. Although the inquiry does not indicate collusion between petrol retailers, there is scope to increase transparency of effective retail petrol prices to encourage a more competitive market. CCS recommended raising awareness among motorists about using the correct octane grades that optimise engine performance.

CCS conducted a market inquiry into infant formula milk to find out the reasons for the significant increase in formula milk prices in recent years. CCS’s recommendations to lower barriers to entry and improve price competition were broadly accepted by the relevant government agencies resulting in a ministerial taskforce formed to implement the key measures.

Outreach and Engagement

CCS co-organised the fifth Competition Law Conference ‘New Approaches For A New Economy’ with the Singapore Academy of Law, which was attended by over 200 practitioners, academics, business professionals and government officials. The Handbook on E-Commerce and Competition in ASEAN was launched at the conference. Developed by CCS with participation from ASEAN competition agencies, the handbook provides a reference for competition authorities when assessing anticompetitive conduct related to e-commerce. A research paper on Big Data and the data landscape in Singapore, by CCS in collaboration with the Personal Data Protection Commission and the Intellectual Property Office of Singapore, was also shared at the conference.

CCS also organised a round-table discussion where senior officials from the competition authorities of nine ASEAN member states discussed the challenges faced and potential areas of future cooperation for e-commerce related cases.

CCS co-hosted a dialogue session with the Singapore Chinese Chamber of Commerce and Industry for trade associations’ members. CCS and the ISEAS-Yusof Ishak Institute also jointly held a symposium on e-commerce, ASEAN economic integration and competition policy and law.

CCS continued its engagement with government agencies to raise awareness of effectively balancing policy objectives and competition. Senior management officials from the Community of Practice for Competition and Economic Regulations (COPCOMER)3 came together at the annual ‘Regulators Tea’ and shared latest developments in regulatory and competition matters.

CCS’s collaterals were published in dual languages to enhance their reach and effectiveness. Light-hearted comics were used to help businesses and government procurement officers understand different forms of bid-rigging practices and how to detect them.

Deepening international linkages with the global and regional competition community

CCS signed its first memorandum of understanding with the Japan Fair Trade Commission to facilitate enforcement cooperation and deepen information exchange. CCS is planning to enter into cooperation agreements with other competition authorities in 2018.

In 2017, CCS was elected as a member of the International Competition Network (ICN) Steering Group and co-chair of the ICN Advocacy Working Group. To familiarise the younger ASEAN competition authorities with ICN work in hope of benefitting from the experiences of more established authorities, CCS jointly hosted a workshop on due process with the ICN Agency Effectiveness Working Group.

At the ASEAN Experts Group on Competition (AEGC) platform, CCS led efforts to develop a competition compliance toolkit to provide guidance to ASEAN Member States on promoting business compliance with competition law and facilitate competition compliance by businesses operating in ASEAN countries.4 CCS also contributed to the development of an ‘Assessment Toolkit on Competition Enforcement and Advocacy’ for competition authorities in ASEAN to carry out a self-assessment of their competition regime. As part of ASEAN’s ongoing efforts to facilitate knowledge exchange and information, CCS hosted two staff members from the Philippines Competition Commission, and carried out a two-way staff exchange between Indonesia’s Commission for Supervision of Business Competition and CCS.

Looking ahead

CCS will be undertaking a comprehensive review of the Competition Act and has launched the public consultation for amendments to the act to provide for confidential advice, legally binding commitments and enhancements to the investigative process. The review will be done with a view to balancing regulatory and business compliance costs against the benefits from effective competition. In addition, we look forward to an exciting year ahead when CCS takes over as Chair of the AEGC and the role of consumer protection in March and April 2018 respectively.

Notes

1 CCS can initiate a more detailed and extensive assessment of the merger under Phase 2 if it is unable to conclude that the merger would not raise competition concerns based on information furnished during the Phase 1 review.

2 The SPID sets out the facts and evidence on which CCS makes its assessment and its reasons for arriving at the proposed decision.

3 Established in December 2013, the COPCOMER is an inter-agency platform for CCS, sectoral competition regulators and a few other government agencies to share best practices and experiences on competition and regulatory matters.

4 The toolkit will be launched in 2018.