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___________________________________________________________________________
2007/CPDG/WKSP/007
Competition Law and SMEs in Singapore
Submitted by: Singapore
3rd Training Course on Competition Policy Singapore
1-3 August 2007
3 rd APEC Training Course on
Competit ion Policy
Sing apore
August 1 , 2 0 0 7
Competit ion Law andSMEs in Sing apore
OVERVIEW
Background: SMEs in Singapore
Competition Law and SMEs in Singapore
An Example from the CCS’ Experience
Background: SMEs in Singapore
Definition of SMEs
Fixed assets of less than$15 million Less than 200 workers
Manufacturing Services
Basic Statistics on SMEs Account for more than 95% of companies in
Singapore
Contribute to 42% of GDP
Employ 57% of the workforce
Distribution of SMEs: Number of companies: 94% (service) 6%
(manufacturing)
Share of GDP: 34% (s) 8% (m)
Share of employment: 47% (s) 10% (m)
Shaping the development ofSMEs in Singapore
SpringSingapore
InternationalEnterprise
(IE)
CompetitionCommissionof Singapore
(CCS)Non-
governmentalorganizations/associations
1. Buildcapabilities2. Provide
Access/Support
Ensure a levelplaying field
1. Promotevibrancy
2. Facilitatenetworking &informationexchange
Promoteoverseas
growth forSingapore-
basedcompanies
OVERVIEW
Background: SMEs in Singapore
Competition Law and SMEs In Singapore
An Example from the CCS’ Experience
Why Competition Law?
Economic Review Committee (ERC)—established in 2002 toreview Singapore’s development strategy
PromoteEnterprise
Growth
Phased Implementation ofCompetition Act
Phased implementation:
– Phase I: 1 Jan 2005 – The CCS was set-up
– Phase II: 1 Jan 2006 – Enforcement/appeal
provisions on anti-competitive agreements and
abuse of dominance to come into force
– Phase III: 1 July 2007 - M&A provisions came
into force
Our Approach Focus on activities that have an appreciable adverse effect oncompetition in Singapore
Recognize that agreements between SMEs are rarely capable ofhaving an appreciable effect on competition
S34 indicative appreciability threshold - 20% market share
S54 merger thresholds - CCS is unlikely to intervene in amerger situation unless:– the merged entity will have a market share of at least 40%; or– the merged entity will have a market share of between 20% and
40% AND the post-merger combined market share of the threelargest firms (CR3) is at least 70%
Minimize Regulatory Burden
Self-Assessment
Voluntary Notification
Simplifying the complaint process &providing how-to-guides for making acomplaint with the CCS
Outreach Efforts to SMEs
Purpose• Increase awareness of anti-competitive practices• Tap on SMEs as a good source of leads
Efforts• Singapore Chambers of Commerce & Industry• Trade Associations• Other government agencies
OVERVIEW
Background: SMEs in Singapore
Competition Law and SMEs in Singapore
An Example from the CCS’ Experience
Price Recommendation by Coffee-shops
Media coverage on price recommendations forcoffee drinks by two coffee-shop associations Combined membership of around 700 out of more than
2,000 coffee-shops in Singapore
Made a joint announcement for adjustment in coffee drinkprices
Gave members price guidelines, but claimed they did notrequire members to adjust their prices uniformly
The CCS’ focus was to help the trade associationsunderstand and comply with the Competition Act.
Challenges Price recommendation by coffeeshop
associations highlights some of the challengescommon to dealing with SMEs Low awareness/understanding of competition law
Mindset: many trade associations traditionally have“protected” members by recommending prices and donot see this as a problem
The perception that the CCS is against price increases