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What is the legal framework in your jurisdiction covering the behaviour of dominant firms?
The abuse of a dominant position is prohibited under general competition law by the operation of section 47 of the Singapore Competition Act (Cap 50B) (Competition Act), which states that ‘any conduct on the part of one or more undertakings which amounts to the abuse of a dominant position in any market in Singapore is prohibited’ (section 47 Prohibition).
However, it is noteworthy that (pursuant to paragraph 5 of the Third Schedule to the Competition Act), where goods and services are subject to any written law or code of practice relating to competition that gives another regulatory authority jurisdiction in the matter, the section 47 Prohibition will not apply to such. In this regard, other pieces of sector-specific legislation contain provisions relating to an abuse of dominance and are enforced separately by the respective regulator.
The Competition Act is enforced by the Competition Commission of Singapore (CCS). The CCS has also issued guidelines on the application of the section 47 Prohibition.
As at January 2018, the CCS has only issued one infringement decision in respect of a violation of the section 47 Prohibition since the provision took effect on 1 January 2006, namely, an abuse of a dominant position by SISTIC.com Pte Ltd CCS 600/008/07 (4 June 2010) (SISTIC case).
Definition of dominance
How is dominance defined in the legislation and case law? What elements are taken into account when assessing dominance?
No definition of dominance is contained within the Competition Act. However, the CCS Guidelines state that an undertaking will not be deemed dominant unless it has substantial market power. The CCS Guidelines go on to state that market power only arises where an undertaking does not face sufficiently strong competitive pressure and can be thought of as the ability to profitably sustain prices above competitive levels, or to restrict output or quality below competitive levels.
The CCS will generally take into consideration the market share of the entity in question, constraints on market power by way of existing competition (having regard to barriers to expansion), constraints on market power by way of potential competition (having regard to barriers to entry), and the significance of any countervailing buyer power.
As there has only been one abuse of dominance infringement finding issued by the CCS to date, it is unclear as to how matters of ‘relative dominance’ or ‘heightened market power’ would be treated under Singapore competition law.
Purpose of legislation
Is the purpose of the legislation and the underlying dominance standard strictly economic, or does it protect other interests?
The objective of the Competition Act (and by extension the section 47 Prohibition) is to promote the efficient functioning of the markets in Singapore and to enhance the competitiveness of the economy through prohibiting anticompetitive activities that unduly prevent, restrict or distort competition. This was clearly expressed during the second reading of the Competition Bill, by the then Senior Minister of State for Trade and Industry (Vivian Balakrishnan).
Sector-specific dominance rules
Are there sector-specific dominance rules, distinct from the generally applicable dominance provisions?
As outlined in question 1, the Competition Act does not apply to any conduct in relation to any goods and services that are subject to any written law or code of practice relating to competition that gives another regulatory authority jurisdiction in the matter. In this regard, the following sectors have their own sector-specific abuse of dominance provisions:
- electricity, under the Electricity Act (Cap 89A) - enforced by the Energy Market Authority;
- gas, under the Gas Act (Cap 116A) - enforced by the Energy Market Authority;
- newspapers and broadcasting, under the Info-communications Media Development Authority of Singapore Act 2016 (No. 22 of 2016) and the Code of Practice for Market Conduct in the Provision of Media Services 2010 - enforced by the Info-communications Media Development Authority of Singapore;
- postal services, under the Postal Services Act (Cap 237A) and the Postal Competition Code 2017 - enforced by the Info-communications Media Development Authority of Singapore;
- telecommunications, under the Telecommunications Act (Cap 323) and the Code of Practice for Competition in the Provision of Telecommunication Services 2012 - enforced by the Info-communications Media Development Authority of Singapore; and
- airport services and facilities, under the Civil Aviation Authority of Singapore Act (Cap 41) and the Airport Competition Code 2009 - enforced by the Civil Aviation Authority of Singapore.
The section 47 Prohibition also does not apply to certain specified activities set out in paragraph 6 of the Third Schedule to the Competition Act (including, inter alia, cargo terminal operations carried out by a person licensed and regulated under the Maritime and Port Authority of Singapore Act (Cap 170A)).
Exemptions from the dominance rules
To whom do the dominance rules apply? Are any entities exempt?
The section 47 Prohibition applies generally to all undertakings in Singapore and section 33 of the Competition Act specifies that the abuse of dominance prohibition will apply to undertakings that are outside of Singapore, where they are engaging in conduct that would infringe the section 47 Prohibition.
However, under section 33(4) of the Competition Act, the section 47 Prohibition will not apply to any activity carried on by, any agreement entered into by, or any conduct on the part of: the government; any statutory body; or any person acting on behalf of the government or that statutory body, as the case may be, in relation to that activity, agreement or conduct.
The Third Schedule to the Competition Act also sets out various exclusions from the application of the section 47 Prohibition which include (inter alia) the activities of clearing houses, and conduct pertaining to the supply of piped potable water, the supply of wastewater management services, the supply of scheduled bus services by a licensed and regulated person, the supply of rail services by a licensed and regulated person, or cargo terminal operations carried on by licensed and regulated persons.
To reiterate, and as outlined in question 5, the section 47 Prohibition does not apply to any conduct in relation to any goods and services that are subject to any written law or code of practice relating to competition that gives another regulatory authority jurisdiction in the matter.
Transition from non-dominant to dominant
Does the legislation only provide for the behaviour of firms that are already dominant?
The section 47 Prohibition requires both that the undertaking in question holds a dominant position and that the undertaking engages in conduct that would amount to an abuse of that dominant position. Accordingly, if it were determined that the undertaking in question was not dominant, its conduct would not fall for consideration under the section 47 Prohibition.
Is collective dominance covered by the legislation? How is it defined in the legislation and case law?
There is no specific reference in the Competition Act relating to collective dominance although the Competition Act provisions for it. In particular, section 47(1) of the Competition Act states that subject to excluded cases, ‘any conduct on the part of one or more undertakings which amounts to the abuse of a dominant position in any market in Singapore is prohibited’ (emphasis added). Additionally, the CCS Guidelines also refer to the concept, and specifically state that a collective dominant position may be held when two or more legally independent undertakings, from an economic point of view, present themselves or act together on a particular market as a collective entity. Essentially, undertakings holding a collective dominant position are able to adopt a common policy on the market and, to a considerable extent, act independently of their competitors, customers and consumers.
For the purpose of analysing the abuse of a collective dominant position, the CCS will consider:
- whether the undertakings concerned together constitute a collective entity vis-à-vis their competitors, their trading partners and consumers on a particular market;
- if so, whether that collective entity is dominant in a relevant market, either in Singapore or elsewhere; and
- if it is, whether there is or has been an abuse of that dominant position in a market in Singapore.
To date, there have been no enforcement actions involving the concept of collective dominance and, accordingly, the boundaries of the concept are yet to be fully tested.
Does the legislation apply to dominant purchasers? Are there any differences compared with the application of the law to dominant suppliers?
There is no distinction or specific reference in the Competition Act or the CCS Guidelines with regard to the application of the section 47 Prohibition to sellers and purchasers. Accordingly, the section 47 Prohibition can be applied to both purchasers and sellers in appropriate circumstances. There is no further guidance from the CCS as to how the application of the prohibition to purchasers and sellers may differ (if at all).
Market definition and share-based dominance thresholds
How are relevant product and geographic markets defined? Are there market-share thresholds at which a company will be presumed to be dominant or not dominant?
The CCS employs the hypothetical monopolist test (otherwise known as the SSNIP test) in its approach to defining the relevant market. This essentially involves the consideration of a hypothetical monopolist of the focal product in question and questioning whether that monopolist could profitably impose a small but significant, non-transitory increase in price. Through the use of this test, the market will be defined as the smallest product group (and geographical area) over which the hypothetical monopolist controlling that product group in that area could profitably sustain such a price increase.
Notwithstanding the analytical framework above, given data limitations in reality, the CCS will commonly rely on qualitative assessments of demand-side and supply-side substitutability in the process of market definition. The conceptual approach in relation to market definition for abuse of dominance cases (ie, the hypothetical monopolist test) will essentially be the same as that employed in the context of merger cases. However, the test in an abuse of dominance context will be likely to contemplate price increases against ‘competitive price levels’ (rather than against ‘prevailing price levels’ in merger cases) in order to avoid the well-known ‘Cellophane fallacy’.
The CCS Guidelines specifically state that ‘there are no market share thresholds for defining dominance under the Section 47 Prohibition’. However, the CCS Guidelines go on to state that, generally, and as a starting point, the CCS will consider a market share in excess of 60 per cent as likely to indicate that an undertaking is dominant in the relevant market. In the SISTIC case, the CCS argued that ‘SISTIC’s persistently high market share over time, as opposed to high market share at a point in time, is indicative of its dominance’. The Competition Appeal Board (CAB) agreed with this proposition and stated that there were no exceptional circumstances shown by SISTIC to rebut such indication.
Abuse of dominance
Definition of abuse of dominance
How is abuse of dominance defined and identified? What conduct is subject to a per se prohibition?
The issue of abuse is assessed by the CCS on a case-by-case basis, and the analysis will be an effects-based analysis, rather than a form-based analysis. That being said, it seems clear from the CCS Guidelines, and from the SISTIC case, that the focus of the CCS will be on exclusionary behaviour, which may include ‘excessively low prices, certain discount schemes, refusals to supply, or vertical restraints, which foreclose (or are likely to foreclose) market or weaken competition’. The CCS Guidelines state that such conduct may be abusive to the extent that it harms competition, for example, by removing an efficient competitor, limiting competition from existing competitors or excluding new competitors from entering the market.
In relation to the SISTIC case, in lodging an appeal to the CAB, one of SISTIC’s grounds of appeal was that its conduct was not abusive and, accordingly, the definition of abuse (and the test for such) was considered by the CAB. In issuing its decision, the CAB determined that an abuse will be established where a competition authority demonstrates that a practice has, or is likely to have, an adverse effect on the process of competition, in particular: it is sufficient for the competition authority to show a likely effect and it is not necessary to demonstrate an actual effect on the process of competition; and if an effect, or likely effect, on restricting competition by the dominant firm is established, the dominant undertaking can advance an objective justification. An objective justification entails adducing evidence to demonstrate that its behaviour produces countervailing benefits such that it has a net positive impact on welfare. However, the burden is on the undertaking to demonstrate an objective justification.
Exploitative and exclusionary practices
Does the concept of abuse cover both exploitative and exclusionary practices?
Despite the Competition Act being modelled on the UK Competition Act (and the European competition laws), purely exploitative conduct would arguably not constitute an abuse of dominance in Singapore. Critically, while UK and European laws contain a specific reference to the direct or indirect imposition of ‘unfair purchase or selling prices or other unfair trading conditions’, this was removed from the Competition Act before it was enacted in Singapore. Moreover, the CCS Guidelines contain no reference (or any examples) with regard to exploitative conduct constituting an abuse of dominance. However, the CCS is yet to make a definitive and binding statement in relation to whether exploitative conduct could constitute an abuse and the position is yet to be legally tested.
Link between dominance and abuse
What link must be shown between dominance and abuse? May conduct by a dominant company also be abusive if it occurs on an adjacent market to the dominated market?
No causal link between dominance and abuse must be shown as a matter of law, and the CCS will assess the issues of dominance and abuse separately.
That being said, there may be instances where the dominance of an undertaking might cast light on the issue of whether its conduct is abusive and vice-versa. In the SISTIC case, the conduct in question involved exclusive contracts between SISTIC and its venue operator and event promoter partners. In considering the question of barriers to entry (in the context of considering whether SISTIC held a dominant position), the CCS observed that SISTIC’s strategic conduct (ie, its exclusive agreements with key industry players) made large-scale entry even harder. In particular, the CCS stated in the SISTIC case that ‘the barrier to entry in relation to network effect is artificially erected and sustained by SISTIC’s strategic conduct’. In this regard, and in appropriate circumstances, it is possible that the CCS will not make determinations of dominance and abuse completely in isolation from one another.
In addition to the above, it is also noted that the CCS Guidelines specifically state that it is not necessary for the dominant position, the abuse and the effects of the abuse to be in the same market.
What defences may be raised to allegations of abuse of dominance? When exclusionary intent is shown, are defences an option?
In assessing whether conduct is abusive, the CCS Guidelines state that the CCS may consider whether the dominant undertaking is able to objectively justify its conduct. However, to rely on this defence, it will be necessary for the dominant undertaking to show that it has behaved in a proportionate manner in defending its legitimate commercial interest and that it had not taken any measures that are more restrictive than necessary in doing so. While the CCS Guidelines indicate that objective justifications will be taken into consideration when assessing whether conduct is abusive, the test arising from the CAB’s decision in the SISTIC case instead suggests that objective justifications can be a defence after the conduct has already been classified as abusive, and that the burden is on the dominant undertaking in question to establish those objective justifications. This is described in further detail in question 10.
Specific forms of abuse
Types of conduct Types of conduct
Indicate to what extent the following types of conduct (questions 14–25) are considered abusive. Mention briefly any leading precedents on, and the relevant tests for, assessing the categories of conduct: Rebate schemes
The CCS Guidelines state that in certain circumstances discounts or rebates could give rise to abuse of dominance concerns. In particular, the CCS Guidelines state that the CCS will consider a range of factors in assessing such discounts, including whether the discounts simply reflect competition to secure orders from valued buyers or whether such discounts have beneficial effects. The CCS Guidelines continue to state that a key question is whether the discount scheme will have an exclusionary effect on competition, which might arise where the discount arrangement amounts to a ‘fidelity discount’ or where it involves the tying of other products. The CCS Guidelines also state that it is necessary for the dominant undertaking to show that its conduct is proportionate to the benefits produced.
In March 2012, the CCS commenced investigations in the local soft drinks market after receiving a complaint that Coca Cola Singapore Beverages (CCSB) had incorporated restrictive provisions in its supply agreements with on-premise retailers, such as exclusivity conditions and conditional rebates. In response to the investigations, CCSB voluntarily amended its supply agreements to remove potentially anticompetitive provisions. In particular, CCSB’s voluntary undertaking to the CCS included a commitment to not grant loyalty-inducing rebates that have an effect of inducing on-premise retailers to purchase exclusively or almost exclusively from CCSB. The CCS ceased its investigation into CCSB in January 2013 following CCSB’s voluntary undertaking.
Tying and bundling
The CCS Guidelines state that tying, which occurs where the manufacturer makes the purchase of one product (the tying product) conditional on the purchase of a second product (the tied product), may amount to an abuse of dominance in certain circumstances. There have been no relevant enforcement cases in Singapore to date.
Exclusivity arrangements, non-compete provisions and single branding may amount to an abuse of a dominant position, and the CCS elaborates on such in the CCS Guidelines. It is noteworthy that the SISTIC case, being the only abuse of dominance infringement decision issued by the CCS to date, primarily involved exclusivity provisions within supply contracts. In the SISTIC case, the CCS observed that the imposition of exclusive purchasing obligations is a common practice in commercial life, which may not be anticompetitive per se. The CCS continued to observe that in many circumstances, exclusive purchasing, especially those that come with discounts and other incentives, may bring about some pro-competitive outcomes such as lower prices and higher efficiency. Accordingly, it would seem that the primary consideration in assessing whether such restrictions are abusive is the extent to which competitors are foreclosed as a result.
In the CCSB investigation, the CCS also considered whether exclusivity conditions in CCSB’s supply agreements amounted to an abuse of a dominant position. CCSB’s voluntary undertaking to the CCS contained commitments to: not impose any exclusivity restrictions on its on-premise retailers for CCSB brands of non-alcoholic beverages, except in limited circumstances; and not require its on-premise retailers who wish to sell other brands of beverages to first negotiate with CCSB.
The CCS ceased its investigation into CCSB in January 2013 following CCSB’s voluntary undertaking.
In June 2014, the CCS commenced an investigation on Cordlife Group Limited (Cordlife) in relation to its exclusive agreements with baby fair organisers and hospitals that potentially have the effect of limiting competition from other providers of cord blood bank services in Singapore. Cordlife provided the CCS with voluntary commitments to remove the existing exclusive arrangements that were the subject of the CCS’s investigation and to ensure that it does not have such exclusive arrangements with any baby fair or private maternity hospital in Singapore going forward. The CCS ceased its investigation in June 2015 as the voluntary commitments adequately addressed its concerns.
The CCS also investigated Asia Pacific Breweries (Singapore) Pte Ltd (APBS) in relation to its practice of supplying draught beer to retail outlets solely on an exclusive basis (outlet-exclusivity practice). APBS provided the CCS with a voluntary commitment to cease its outlet-exclusivity practice for all draught beer contracts entered into with retailers on and after 28 December 2015, including new and renewal contracts. The CCS ceased its investigation in October 2015 as the voluntary commitment adequately addressed its concerns.
The Competition Act, at section 47(2)(a), specifically states that ‘predatory behaviour towards competitors’ may constitute an abuse of dominance. Factors relevant to an assessment of whether predation is taking (or has taken) place may include: pricing below cost, intention to eliminate a competitor, and the feasibility of recouping losses.
The CCS Guidelines state that, in assessing predatory pricing cases, the CCS will have regard to the relevant price level against two measures of cost: average variable cost and average total cost. The Guidelines continue to state that, in the absence of an objective justification, predation may be presumed where price is below average variable cost. Where price is above average variable cost, but below average total cost, then the CCS will have regard to other evidence. Where price is above average total cost, the CCS Guidelines state that this will not indicate predation.
To date, there have been no enforcement actions taken by the CCS involving predatory pricing.
Price or margin squeezes
Where a dominant, vertically integrated undertaking discriminates in the supply of an input to downstream entities (ie, providing preferential terms to its own downstream affiliate), such actions could be considered abusive according to the CCS Guidelines. Such actions can be called ‘price squeezes’ or ‘margin squeezes’. The CCS Guidelines state that, in testing for a margin squeeze, the CCS will generally determine whether an efficient downstream competitor would earn (at least) normal profit when paying input prices set by the vertically integrated undertaking. To date, there have been no enforcement actions in Singapore involving price squeezes.
Refusals to deal and denied access to essential facilities
The CCS Guidelines state that undertakings generally have the freedom to decide whom they will deal with and not deal with and, accordingly, that a refusal to supply will generally not be abusive. An exception arises where there is a refusal (or constructive refusal) to supply an essential facility. The CCS Guidelines state that a facility will be viewed as essential only where it can be demonstrated that access to it is indispensable in order to compete in a related market, and where duplication is impossible or extremely difficult owing to physical, geographic, economic or legal constraints (or is highly undesirable for reasons of public policy).
Following a complaint received, the CCS commenced an investigation into the allegation that several companies were refusing to supply lift spare parts for maintenance of lifts in public housing estates in Singapore. E M Services Pte Ltd (E M Services) provided the CCS with voluntary commitments to supply BLT lift spare parts in Singapore to third-party lift maintenance contractors in Singapore. The CCS ceased its investigation into E M Services in 2016 as the voluntary commitments adequately addressed its concerns.
The CCS conducted a public consultation exercise from 15 to 28 November 2017 in relation to proposed voluntary commitments from two other suppliers namely, BNF Engineering (S) Pte Ltd (BNF), which supplies spare parts for the BNF brand of lifts, and C&W Services Operations Pte Ltd (CWO), which supplies spare parts for the Ulift brand of lifts in Singapore. The CCS noted in its public consultation media release that ‘if a lift company or distributor does not provide proprietary but essential lift spare parts to third-party lift maintenance contractors, other lift maintenance contractors may be prevented from effectively competing for contracts to maintain and service lifts of that particular brand in Singapore’. The voluntary commitments provide that BNF and CWO will undertake to sell lift spare parts of the relevant brands to a purchaser subject to certain terms and conditions that relate to the following:
- the terms of supply on a fair, reasonable and non-discriminatory basis;
- ensuring that the purchaser is adequately qualified to service the said lifts;
- clarifying liability in the event of any mishaps, injuries or loss that arise;
- ensuring that the lift spare parts purchased are not modified or used for other lift brands; and
- seeking consent from the owner of the relevant lift to be repaired.
As at 17 January 2018, the CCS is still assessing whether to accept or reject each of the proposed commitments by BNF and CWO.
Predatory product design or a failure to disclose new technology
Predatory product design or failure to disclose new technology is not specified as potentially abusive conduct within the CCS Guidelines, nor has it been considered specifically by the CCS in any case to date. Notwithstanding this, the CCS has indicated that it will consider the likely effects on competition based on the specific facts and circumstances of each case.
The CCS Guidelines state that price discrimination is a usual business practice in a wide range of industries, including those in which competition is effective. However, it goes on to acknowledge that price or non-price discrimination (ie, discrimination in relation to service) may be abusive in certain circumstances. The CCS Guidelines highlight that price discrimination could be problematic where it gives rise to a predatory pricing issue, a loyalty-inducing rebate or discount issue or a margin squeeze issue. In this regard, it is arguable that price discrimination may simply be symptomatic of an abuse in a different form (ie, a margin squeeze), and that the CCS may not seek to frame discrimination as an abuse in and of itself. To date, there have been no cases in Singapore involving price or non-price discrimination taken by the CCS.
Exploitative prices or terms of supply
Exploitative prices or supply conditions would arguably not constitute the abuse of a dominant position in Singapore (see question 11).
Abuse of administrative or government process
The CCS Guidelines do not specifically identify ‘abuse of government process’ as a potential abuse of dominance, and there have been no relevant enforcement cases in Singapore to date. Notwithstanding this, the CCS has indicated that it will consider the likely effects on competition based on the specific facts and circumstances of each case.
Mergers and acquisitions as exclusionary practices
The CCS Guidelines do not specifically identify structural issues arising from mergers or acquisitions as potentially amounting to an abuse of dominance, and there have been no relevant enforcement cases in Singapore to date. Notwithstanding this, the CCS has indicated that it will consider the likely effects on competition, based on the specific facts and circumstances of each case.
Other than those types of abuses considered above in questions 14 to 24, there are no other types of abuse specifically identified in the CCS Guidelines. However, the CCS has indicated that it will consider the likely effects on competition, based on the specific facts and circumstances of each case. In this regard, it may be open to the CCS to consider other abusive conduct depending on the circumstances.
Which authorities are responsible for enforcement of the dominance rules and what powers of investigation do they have?
The CCS enforces the Competition Act and, accordingly, the abuse of dominance provisions thereunder. Generally, the CCS 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 CCS has the ability to specify how that information is to be provided and routinely conducts interviews. The CCS also has a range of powers related to those powers already indicated (for instance, when entering premises under a warrant, the CCS 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.
Sanctions and remedies
What sanctions and remedies may the authorities impose? May individuals be fined or sanctioned?
Under section 69 of the Competition Act, the CCS 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 CCS 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 CCS such financial penalty in respect of the infringement as the CCS 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 CCS 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 CCS; and
- require an undertaking to provide a performance bond, guarantee or other form of security on such terms and conditions as the CCS 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, the CCS had in January 2018 concluded its public consultation with respect to its proposed amendments to the Competition Act that are aimed at providing the CCS with appropriate enforcement tools and to streamline existing processes. Among the proposed amendments, the CCS has proposed that it be empowered to accept binding and enforceable commitments for cases involving the section 47 Prohibition. As explained in its public consultation paper, the CCS’s current powers enable it to accept voluntary undertakings from entities under investigation for breaches of the section 47 Prohibition. However, should these entities breach such voluntary undertakings subsequently, the CCS’s only recourse is to undertake the resource-intensive approach of reopening the investigation into the matter. This approach does not allow the CCS to address the harm to the relevant market(s) in a timely manner because voluntary undertakings, unlike commitments, are not binding and enforceable. The proposed amendment empowering the CCS to accept binding and enforceable commitments would therefore assist the CCS 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 CCS 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 CCS 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 CCS is known to actively investigate potential violations of the prohibition and may have a number of such investigations open at any one time. The CCS 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 abuse of dominance prohibition. However, should the CCS 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 CCS 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 after 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 CCS, 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 CCS’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 CCS’s infringement decision. Thereafter, the CCS 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.
Unilateral conduct by non-dominant firms
Are there any rules applying to the unilateral conduct of non-dominant firms?
No. There are no specific restrictions under the Competition Act relating to unilateral conduct by non-dominant firms.
Update and trends
Update and trends
Updates and trends
The CCS noted in its written submission to the OECD Global Forum on Competition 2017 that market structures and business conduct are becoming increasingly complex with the advent of innovative disruptors, the digital economy and big data. The CCS has undertaken various studies on big data, and more generally the e-commerce sector, over the past two years in order to ‘keep up with the dynamic nature of the digital economy, and ensure that it has a nuanced understanding of the impact of these new business modalities and strategies on market structures’.
The CCS has also undertaken enforcement action in relation to the e-commerce sector. For example, the CCS investigated an alleged anticompetitive practice by an online food delivery provider in Singapore in 2016. The investigation revealed that the online food delivery provider had entered into exclusive agreements with certain restaurants that prevented these restaurants from using other providers’ services. The CCS ceased its investigation as competition has not been harmed. The CCS acknowledged that the ‘online food delivery industry is currently vibrant with new entrants competing aggressively and market shares changing significantly’.
More generally, the CCS indicated in December 2016 that it was undertaking a comprehensive review of the Competition Act. Subsequently, in a media release dated 21 December 2017, the CCS sought public feedback in relation to the following amendments aimed at providing the CCS with appropriate enforcement tools and to streamline existing processes:
- empowering the CCS to accept binding and enforceable commitments for cases involving the section 34 and section 47 Prohibitions;
- empowering the CCS to conduct general interviews during inspections and searches under section 64 and section 65; and
- codifying the CCS’s ability to provide confidential advice on anticipated mergers.
The public consultation closed on 11 January 2018 and the outcome of the public consultation is still pending.
In addition, the CCS will take on consumer protection powers under the Consumer Protection (Fair Trading) Act with effect from 1 April 2018.
Given the above, legislative amendments to the Competition Act are likely to be introduced in Parliament in 2018.