International Focus on Sustainability

Sustainability has taken centre stage globally and has featured as a discussion point at OECD Competition Committee panels in 2020 and the 2021 OECD Competition Open Day.

The commonly agreed definition of “sustainability” is set out in a report from the World Commission on Environment and Development, which defines it as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. While there may be as many approaches as there are resources used for development, the main concern has been that of environmental sustainability in light of growing concern over the effects of climate change.

Efforts to achieve sustainability often require industry-wide and even international cooperation to have any appreciable effect. This cooperation raises questions about the potential conflict between competition and sustainability goals. There are ongoing discussions about whether such conflicts do in fact exist, and how competition policy and sustainability goals can be better aligned.

Engagements by the Competition and Consumer Commission of Singapore

The Competition and Consumer Commission of Singapore (“CCCS”) has been engaged in this area including the award of research grants on the subject of competition and consumer protection and sustainability, as well as organising an economic roundtable on the subject and a public essay competition. The CCCS is also engaging with and advising government agencies on government efforts to promote sustainability and potential competition risks and concerns that could arise from such efforts.

Government Advisories

In its Annual Report for 2021/2022, CCCS has disclosed that for its financial year ending March 2022, it had advised and discussed with government agencies potential competition risks that could arise from government initiatives promoting sustainability that involved the use of fee guidelines or regulations, and the development of industry-specific platforms or standards to enable businesses to share capacity.

In general, we expect that the competition law risks can be managed as long as the initiatives do not facilitate price-fixing, bid-rigging, output restrictions and/or market sharing by competing businesses, and if the businesses involved in collaborating with the government do not have market power. However, as is typical in competition law assessment, each case would turn on its facts and the broader economic impact on any relevant markets.

While details of such advisories have not been made public, this appears to be aligned with CCCS’ issuance of its Guidance Note on Business Collaborations in December 2021. The Guidance Note set out considerations for businesses to take note of so they can work together with greater confidence and certainty that such collaborations would not run afoul of competition law. The Guidance Note was developed from a similar note released during the COVID-19 pandemic and reflects CCCS’ acknowledgement that businesses have been developing and adapting to rapidly changing operating conditions and certain collaborations between businesses can in fact have pro-competitive effects.