The Competition Commission of Singapore (CCS) recently fined 16 coach operators and their trade association, Express Bus Agencies Association (EBAA), a total of S$1.69 million (approximately A$1.34 million) for breaching the Competition Act (Cap 50B) (Act) by agreeing to fix the price of bus fares from Singapore to various destinations in Malaysia.
The Act essentially prohibits agreements between, or collusive conduct by, businesses which have the object or effect of preventing, restricting or distorting competition within Singapore.
The 16 coach operators and the EBAA were found to have breached this prohibition by:
- agreeing minimum selling prices for bus fares to specific destinations in Malaysia, and
- agreeing to impose, and increase, fuel and insurance charges.
This is only the second infringement decision issued by the CCS since it was established in 2005. It therefore provides important practical guidance to the CCS’ approach to the application of competition law in Singapore.
In particular, it confirms the CCS’ position that it is not necessary for parties to expressly commit to a course of action for an infringement to be found. Rather, it will be sufficient that a party participates (even if not actively) in the discussion leading to the price fixing agreement and does not actively distance itself from the proceedings of those meetings.
Second, the CCS, which can only impose a financial penalty if it has found that the infringement was committed intentionally or negligently, rejected arguments by several of the parties that they should not be fined because they were unaware that the conduct was prohibited or, in the case of the EBAA, the law was unclear in relation to price recommendations. In relation to the coach operators, the CCS’ view was that ‘price fixing arrangements, as in this case, are serious infringements…which have as their object the restriction of competition, and are likely to have been, by their very nature, committed intentionally.’
Third, the case is a timely reminder of the need for businesses to review business practices in light of the Act. The CCS found that the conduct in question started as early as 2005, prior to the relevant provisions of the Act coming into effect, but continued through to 2008, when the CCS commenced its investigations. As the conduct continued well beyond the transitional period applying after the Act was introduced, this was reflected in the quantum of fine imposed on the parties.