On 17 June 2015, the Competition Commission of Singapore (the “CCS”) announced that Cordlife Group Limited (“Cordlife”) has provided voluntary commitments to remove its existing exclusive arrangements with baby fair organisers and private maternity hospitals. This follows an investigation by the CCS that such agreements could potentially limit competition from other providers of cord blood bank services in Singapore. Cordlife must also provide the CCS with confirmation that the affected baby fair organisers and hospitals have been informed of the change in Cordlife’s business practices.
In June 2014, the CCS commenced an investigation on Cordlife in relation to its exclusive agreements with baby fair organisers and hospitals. The CCS stated in its media release that if the exclusive agreements were found to restrict competition in the cord blood bank industry, Cordlife would have infringed section 47 of the Competition Act (the “Act”) which prohibits the abuse of a dominant position.
After reviewing the facts and circumstances of the case and on the basis of the commitments, the CCS has ceased its investigation on Cordlife’s exclusive arrangements with baby fair organisers and hospitals. The CCS will, however, continue to closely monitor market practices in the cord blood bank industry. The CCS reserves the right to reopen investigation should Cordlife breach any of its commitments.
Section 47 prohibition and exclusivity restrictions
Section 47 of the Act prohibits any conduct on the part of one or more undertakings which amounts to the abuse of a dominant position in any market in Singapore. The dominant position can be within Singapore or elsewhere. The CCS’ investigation highlights again the importance of assessing in any commercial negotiation when exclusivity restrictions will likely put an organisation at risk.