Special Report: SingaporeAn overview of competition law in Singapore and the Competition Commission of Singapore as the country celebrates 50 years of independence

Policy and Regulatory Report provides forward-looking proprietary intelligence on antitrust issues, competition law, merger review, intellectual property, international trade and trade disputes, litigation and FCPA/anti-bribery legislation.

Competition law in Singapore aimed to make markets work wellSingapore celebrates its 50th anniversary this year and 2015 also marks a major milestone for competition law in the country as the Competition Commission of Singapore (CCS) celebrated its 10th anniversary earlier this year.

This decade-old antitrust agency has matured significantly in curbing anticompetitive conduct since its first infringement decision against pest control operators for bid-rigging in January 2008, three years after it commenced operations on 1 January 2005.

In the initial years, its role was more focused on sustaining advocacy, in explaining to businesses the importance and benefits of competition law. Over the years as the CCS has gained more experience, it is striving to facilitate the government on policy matters while continuing to enforce the law to ensure that Singapore remains a competitive economy.

“There is no room for complacency or relying on reputation. We need to always engage, persuade and convince”, says its chief executive, Han Li Toh.

Given the size of its open economy, Singapore’s competition regime is a significant enabler to sustain its competitiveness, adaptability and innovativeness.

The evolution of the competition agency is well entrenched in Singapore’s history. Two decades after its independence in 1965, the country witnessed the first major recession in 1985-86 with the collapse in oil prices. Though this was followed by a decade of economic growth, by 2003, Singapore’s economy was again challenged by globalization, the Asian Financial Crises and the changes in the geo-political landscape.

Against this backdrop, the idea of setting up a competition agency was planted as depicted in the book: “10 Years of Championing Growth and Choice”, released by the CCS to commemorate its 10th anniversary.

The Economic Review Committee (ERC) felt the need to ensure that Singapore’s economic strategies were in tune with the demands of a globalized market economy, paving the way for the enactment of a national competition law in 2005. The idea was to create a pro-enterprise environment ensuring “a generic competition [law] to institutionalize a regime where no company enjoys unfair privileges, and must compete on equal footing in the market with others”.

The importance of competition law to Singapore is also well described in a recently released book Competition Law and Policy in Singapore, (Second edition), where the co-authors Cavinder Bull SC and Lim Chong Kin comment on how “Entrepreneurs are generally free to set up businesses in any sector in Singapore with little intervention by the Government unless there are overriding social or political considerations. Foreign firms and products compete freely with domestic firms in the market. Competition drives the efficient allocation and

use of the economy’s scarce resources. Consumers in turn enjoy the fruits of competition”.

Quoted in CCS’ commemorative anniversary book and voicing the views of most Singaporean lawyers, Kala Anandarajah, head competition & antitrust and trade at Rajah & Tann, says that competition agency is viewed “as a friendly party and not as a regulator out to get businesses”.

The CCS continues to strive ahead and is considered to be a strong competition regulator championing the cause not only in Singapore but across the ASEAN region, and often seen to be the Big Brother by other member states.

Deswin Nur, head of international cooperation at Indonesia’s Commission for the Supervision of Business Competition describes the CCS as being “creative, efficient and swift”. Highlighting the agency’s efficiency despite its limited resources, Nur is quoted in the book saying that the Singapore authority reacts swiftly, “sometimes in a manner of seconds.”

With the change in chairmanship at the CCS from Chuan Leong Lam to Aubeck Kam in 2015, the agency proclaims a new mission and vision from “championing competition for growth and choice” to “making markets work well”.

Its new chair, Kam explains that while competition today is a familiar concept among practitioners in the field, to the layman, it is often perceived as an abstract concept. Hence the new mission statement reflects on how competition will create new opportunities for growth through innovation, and also emphasizes that competitive markets bring more choice for consumers and businesses.

Infringement involving hard-core cartels - both domestic and international - as well as abuse of dominance cases, will continue to remain top enforcement priorities for the authority.

Perhaps the best way to depict CCS’ growth would be to highlight some of the key cases over the past 10 years. While the pest control case marks the first bid-rigging infringement decision issued, SISTIC was the first decision issued against abuse of dominance in June 2010.

The Express Bus cartel is equally symbolic as it earmarks the first appeal decision issued by the Competition Appeal Board.

The ball bearings cartel is indicative of CCS’ maturity in its first international cartel infringement decision in 2014. This was closely followed by its decision in the international freight forwarders cartel case.

The Parkway/Radlink merger is important as it is the first merger blocked by the authority, while the SEEK/Jobstreet merger was cleared conditional upon behavioural-cum-structural commitments.

There are a whole host of 34 live cases presently under investigation, mostly pertaining to alleged cartel behavior.

As the CCS enters the second decade, it proposes to streamline some of the regulations and guidelines given the

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changing antitrust environment and as more jurisdictions introduce competition law.

The agency is also looking at enhancing enforcement tools, Toh tells PaRR, with the aim of striking a balance between fully mitigating the effects of anticompetitive practices versus a more prompt resolution of a case that would benefit Singapore’s public, business and economic interests.

Given the limited staff strength and increase in the number of cases, the CCS is studying the feasibility of implementing settlements or other types of fast-track processes, common in many established jurisdictions.

With the increase in the number of leniency applications, particularly from multinational companies, alleged to have engaged in cartel behavior, the CCS is reviewing its leniency guidelines.

The legal fraternity anticipates a change in the market dominance threshold to be brought down to around 40% from the prevailing 60%. There have also been discussions over the possible removal of exemptions granted to vertical agreements, in respect to resale price maintenance.

All in all, the CCS wants to ensure that its policies are in line with the best practices in developed jurisdictions.

The agency however, is not resting on its past laurels. Toh tells PaRR that the three most important goals for the authority going forward are: to be a credible and respected enforcer; a good advocate and adviser of competition policy to the government; and promote a competition culture in Singapore and the region.

by Freny Patel

Editor (Asia)

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