Enforcement proceedings in dominance in Singapore

Enforcement proceedings

Which authorities are responsible for enforcement of the dominance rules and what powers of investigation do they have?

The CCCS enforces the Competition Act and, accordingly, the abuse of dominance provisions thereunder. Generally, the CCCS has the power to require the provision of documents and information from any person, to enter premises with or without a warrant and to search premises with a warrant. In requiring the provision of documents and information, the CCCS has the ability to specify how that information is to be provided and routinely conducts interviews. The CCCS also has a range of powers related to those powers already indicated (for instance, when entering premises under a warrant, the CCCS may, inter alia, use such force as is reasonably necessary for that purpose or search any person on the premises in certain circumstances). In relation to the authorities tasked to enforce sector-specific abuse of dominance provisions, see question 4.

What sanctions and remedies may the authorities impose? May individuals be fined or sanctioned?

Under section 69 of the Competition Act, the CCCS can make such directions as it considers appropriate to bring an infringement to an end or to remedy, mitigate or eliminate any adverse effect of the infringement (which potentially could involve structural or behavioural directions). In this regard, the CCCS has a general discretion in relation to the sanctions it imposes, although it may (inter alia):

• require parties to an agreement to modify or terminate the agreement;
• require an undertaking to pay to the CCCS such financial penalty in respect of the infringement as the CCCS may determine (where it determines that the infringement has been committed intentionally or negligently), but not exceeding 10 per cent of the turnover of the business of the undertaking in Singapore for each year of infringement for a period of up to a maximum of three years;
• require an undertaking to enter such legally enforceable agreements as may be specified by the CCCS that are designed to prevent or lessen the anticompetitive effects that have arisen;
• require an undertaking to dispose of such operations, assets or shares of such an undertaking in such a manner as may be specified by the CCCS; and
• require an undertaking to provide a performance bond, guarantee or other form of security on such terms and conditions as the CCCS may determine.

In the SISTIC case, SISTIC was directed to pay a financial penalty of S$989,000 (which was reduced on appeal to S$769,000). Moreover, SISTIC was required to remove exclusivity clauses from certain agreements.

More generally, pursuant to the Competition (Amendment) Act 2018, which came into force on 16 May 2018, the CCCS is now empowered to accept binding and enforceable commitments for cases involving the section 47 Prohibition. This followed a public consultation concluded by the CCCS in January 2018, which concerned the then-proposed amendments to the Competition Act that were aimed at providing the CCCS with appropriate enforcement tools and to streamline existing processes.

Previously, the CCCS’s powers only enabled it to accept voluntary undertakings from entities under investigation for breaches of the section 47 Prohibition. However, should these entities breach their voluntary undertakings subsequently, the CCCS’s only recourse would have been to undertake the resource-intensive approach of reopening the investigation into the matter. This approach did not allow the CCCS to address the harm to the relevant market or markets in a timely manner because voluntary undertakings, unlike commitments, are not binding and enforceable. The amendments empowering the CCCS to accept binding and enforceable commitments were intended to, therefore, assist the CCCS in its enforcement efforts, enabling it to promptly enforce the commitments with the Singapore courts in the event of a subsequent breach by any of the same entities of the section 47 Prohibition.

Can the competition enforcers impose sanctions directly or must they petition a court or other authority?

Yes, the CCCS has the ability to impose directions and sanctions (including financial penalties) that it considers appropriate to bring an infringement to an end, or to remedy, mitigate or eliminate any adverse effect of the infringement.

What is the recent enforcement record in your jurisdiction?

The SISTIC case (as detailed in question 1), remains the only enforcement decision made by the CCCS to date, relating to the abuse of a dominant position. The case is a landmark case in so far as it clarified the test for abuse of dominance in Singapore.

However, the CCCS is known to actively investigate potential violations of the section 47 Prohibition and may have a number of such investigations open at any one time. The CCCS has made several public statements noting the closure of several abuse of dominance investigations following the receipt of voluntary undertakings from the parties under investigation.

Where a clause in a contract involving a dominant company is inconsistent with the legislation, is the clause (or the entire contract) invalidated?

While provisions of agreements that are determined to be anticompetitive under section 34 of the Competition Act are void in accordance with section 34(3), there is no equivalent provision in respect of violations of the section 47 Prohibition. However, should the CCCS determine that a contractual provision gives rise to an abuse of dominance concern, it can impose any such direction that it considers appropriate to bring the infringement to an end, or to remedy, mitigate or eliminate any adverse effect of the infringement.

To what extent is private enforcement possible? Does the legislation provide a basis for a court or other authority to order a dominant firm to grant access, supply goods or services, conclude a contract or invalidate a provision or contract?

The Competition Act only provides a right of follow-on actions for damages where the finding of an infringement by the CCCS is a necessary precondition and where all avenues of appeal have been exhausted.

The right extends only to those parties who have suffered loss or damage directly as a result of an infringement of an operative provision of the Competition Act, and all such actions must be brought within two years of the expiry of the relevant appeal periods.

Do companies harmed by abusive practices have a claim for damages? Who adjudicates claims and how are damages calculated or assessed?

Parties may bring private actions for a breach of competition law under section 86 of the Competition Act, which provides that any person who suffers loss or damage directly as a result of an infringement (including, inter alia, of the section 34 Prohibition) shall have a right of action for relief in civil proceedings. The Competition Act does not allow parties to claim for double or treble damages.

Such rights are predicated on an infringement finding by the CCCS, and may only be brought within two years following the expiry of any applicable appeal periods.

To date, there have been no cases in Singapore relating to the award of damages relating to abuse of dominance infringements.

To what court may authority decisions finding an abuse be appealed?

Appeals of the CCCS’s decisions are made to the CAB, which is an independent body established under section 72 of the Competition Act. The CAB comprises 15 members including lawyers, economists, accountants, academics and other business people. In the usual course, a panel of five members will be appointed to hear an appeal. The CAB’s powers and procedures are set out primarily in section 73 of the Competition Act and the Competition (Appeals) Regulations.

Appeals are made by lodging a notice of appeal, in accordance with the Competition (Appeals) Regulations, within two months from the date of the CCCS’s infringement decision. Thereafter, the CCCS has six weeks to file its defence. The procedure and timetabling of the appeal may be determined at any time during the proceedings by the CAB, usually through holding a case management conference with the parties. The CAB has broad powers to make directions it thinks fit to determine the just, expeditious or economic conduct of the appeal proceedings. The CAB may review issues of facts and law.

Parties may appeal the CAB’s decisions, in accordance with section 74 of the Competition Act, to the High Court on a point of law arising from a decision of the CAB, or in respect of any decision made by it as to the amount of the financial penalty. Appeals are brought by way of originating summons, and the procedure governing the appeal is set out in order 55 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed).

Parties may also appeal High Court decisions to the Court of Appeal under section 74 of the Competition Act. Such appeals are governed by the same procedure as all other civil appeals in Singapore. There is no further right of appeal from the Court of Appeal.