Competition Law

Published date01 December 2018
Date01 December 2018
Overview of Competition and Consumer Commission of Singapore's decisions and work in 2018

10.1 The year 2018 was an important year for the Competition and Consumer Commission of Singapore (“CCCS”) as it took up its new consumer protection role. This enables the CCCS to further protect consumers in a holistic manner through its new powers to take action under the Consumer Protection (Fair Trading) Act1 (“CPFTA”) against businesses that engage in unfair trading practices.

10.2 Importantly, there have been further changes and developments to the Singapore competition landscape. The amendments to the Singapore Competition Act2 (“the Act”) were passed and came into force on 16 May 2018. Under the amended Act, the CCCS now has the powers to accept binding and enforceable commitments for cases involving anti-competitive agreements and abuses of dominant position, to conduct general interviews during dawn raids and to provide confidential advice to companies for anticipated mergers that have yet to be publicly announced. Further, in light of the number of notifications regarding airline alliance agreements, the CCCS has published its Guidance Note on Airline Alliance Agreements so as to streamline and clarify the review process.

10.3 On the enforcement front, with regards to anti-competitive agreements under s 34 of the Act, the CCCS issued two infringement decisions and one provisional infringement decision (of which the infringement decision has been issued this year). Significantly, one of the infringement decisions, which involved 13 fresh chicken distributors, resulted in the CCCS handing down its record fine of S$26.9m. In respect of enforcing the s 54 prohibition against anticompetitive mergers, the CCCS commenced its first investigation into a

completed unnotified merger; that was the acquisition of Uber by Grab. The investigation led to the CCCS issuing an infringement decision against the merger parties, as well as imposing a S$14m fine. Lastly, while the CCCS did not issue any decision relating to abuse of dominance under s 47 of the Act, it managed to finalise commitments offered by two suppliers of lift spare parts.

10.4 Apart from infringement decisions, the CCCS has also issued several decisions relating to notifications received under ss 34 and 54 of the Act in 2018. For s 34, the CCCS received one notification for a decision regarding a proposed joint venture for slaughtering services, which involved parties that were competitors in the poultry industry. As the CCCS was of the view that competition concerns would arise from the joint venture, it approved the joint venture only after commitments were offered. With regards to notifications under s 54, the CCCS issued ten unconditional clearance decisions and one provisional statement of decision. The provisional statement of decision issued was in relation the proposed acquisition of Wilhelmsen Maritime Services AS of Drew Marine, which the CCCS provisionally found was likely to result in a substantial lessening of competition in the relevant markets.

10.5 At the international level, there is currently a trend towards increasing co-operation between competition authorities across the ASEAN region. This can be seen from the memorandum of understanding on enforcement co-operation of competition law entered into by Singapore and Indonesia, as well as the establishment of the ASEAN Competition Enforcers' Network, Regional Co-operation Framework and Virtual Research Centre. These developments aim at facilitating cross-border co-operation in relation to enforcement and merger assessments between different competition authorities, with the aim of arriving at consistent decisions and enforcement outcomes across the region.

CCCS's new consumer protection role

10.6 With effect from 1 April 2018, the Competition Commission of Singapore (as it then was) took on the additional role of consumer protection that was previously under Spring Singapore and was renamed the Competition and Consumer Commission of Singapore. This new role encompasses administering the CPFTA and preventing businesses from engaging in unfair trade practices.

10.7 While the CCCS now has the responsibility of enforcing the CPFTA, it is not the sole port of call for complaints by consumers, as the Consumers Association of Singapore (“CASE”) retained its role as the bridge between consumers and businesses. Consumers wishing to lodge complaints against businesses will have to raise them with CASE, who then facilitates the settlement of the disputes by way of mediation. If businesses refuse to cease their unfair practices and persist in exploiting consumers, CASE will refer the matter to the CCCS, who may then commence investigations against them. Under its new role, the CCCS is empowered to collect evidence against errant businesses, file injunction applications against them and enforce compliance with injunction orders issued by the courts. Interestingly, unlike its competition protection role, the CCCS does not have the power to impose financial penalties on businesses for infringing consumer protection laws, or to direct infringing businesses to compensate consumers.

10.8 As observed by the Senior Minister of State in the Ministry of Trade and Industry, Dr Koh Poh Koon, this development is welcome as the CCCS is well placed to take up the additional consumer protection role. This is due to the complementary relationship between competition and consumer protection, which is reflected in their common goal of benefitting consumers. Although the CCCS has generally advocated for total welfare in society (which includes both producer welfare and consumer welfare) as opposed to only consumer welfare in the context of competition protection, this does not detract from the fact that the total welfare approach ultimately benefits consumers through efficiency gains.

10.9 In this regard, the integration of the two functions will give rise to new synergies between competition and consumer protection. For instance, in relation to carrying out market studies, while it is not something new to the CCCS, in light of its new consumer protection role, the CCCS can and must now exercise an additional consumer protection perspective when carrying out market inquiries in the future. An illustration given by the CCCS was its 2017 market inquiry on the supply of car parts in Singapore. A potential concern that emerged was that under the warranty terms and conditions, consumers could only send non-warranty related servicing and repairs to specific authorised workshops. In turn, this restricted competition as it prevented independent workshops from competing effectively with authorised workshops. The CCCS consequently enlisted the co-operation of major car dealers in removing the warranty restrictions from their terms and conditions so as to facilitate a more competitive market, which ultimately encourages suppliers to offer more competitive prices to consumers. From a consumer protection perspective, given that the CCCS now has new powers under the CPFTA, it may now go one step further in protecting the interests of consumers. For instance, it can ensure that even after the removal of warranty restrictions, customers would not be misled to believe there is still such a requirement even if it is not specified in the contract. By approaching these issues from both the competition and consumer protection angles, the CCCS will then be able to effectively achieve the goal of benefiting consumers.

10.10 In this respect, the CCCS is currently conducting two new market studies, the first being a market study in the market for online travel booking services, and the second being a joint study with the Personal Data Protection Commission to examine competition, consumer and personal data protection issues that could potentially arise if a right to data portability is introduced in Singapore.

Amendments to the Act

10.11 On 19 March 2018, the amendments to the Act were passed and took effect on 16 May 2018. There are three key amendments, which are set out below.

10.12 First, the CCCS is now empowered to accept binding and enforceable commitments for cases involving ss 34 (for anti-competitive agreements) and 47 (for abuse of dominance under the amended ss 60A and 60B of the Act. Previously, only commitments accepted under s 54 (for mergers that substantially lessen competition) were binding and enforceable. While the practice of accepting commitments under ss 34 and 47 is not new, the voluntary undertakings are arguably neither binding nor enforceable without this amendment, and any non-compliance can only be remedied by commencing new investigations. In practice, although there has yet to be a case of non-compliance with commitments provided under the old Act, the amendment seeks to address this lacuna in the law. Further, the amendment aligns the practice of accepting commitments under ss 34 and 47 with that under s 54.

10.13 Second, the CCCS's powers of investigation have now expanded to include a power to conduct general interviews during inspections and searches under s 63(4A) of the Act, which allows the CCCS to question the occupants of the premises when dawn raids are carried out. Previously, the CCCS's power to conduct interviews was limited as it had to first serve a written notice to require any person to provide specified information. Otherwise, it was not allowed to pose any questions to anyone during inspections. At first sight, the amendment seemed to merely simplify the interview process during dawn raids as it only removed the notice requirement. However, from a practical standpoint, although the CCCS has expressly stated that this power is limited to the subject-matter or the purpose of the investigation, there may still be a risk that the limits will be overstepped. This is because the individuals being questioned may be unaware of the limits of this power and may respond to questions...

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