OECD kpcdb

1. Competition Law 

 

The Competition Act (Chapter 50B) (the “Competition Act”) enacted in 2004 is the main legal instrument on competition policy in Singapore.

 

The Competition Act and the Singapore Competition Commission’s aim is to maintain and enhance efficient market conduct and promote overall productivity, innovation and competitiveness of markets in Singapore; to eliminate or control practices having adverse effect on competition in Singapore; to promote and sustain competition in markets in Singapore; to promote a strong competitive culture and environment throughout the economy in Singapore;

 

The Competition Act prohibits 3 types of activities, namely anti-competitive agreements (the Section 34 prohibition), abuse of dominant position (the Section 47 prohibition), and mergers and acquisitions that substantially lessen competition in Singapore (the Section 54 prohibition).

 

General exclusion: 

 

The Competition Act regulates the conduct of undertakings which include any natural or legal person or any other entity, including foreign entities, capable of conducting commercial or economic activities. It thus applies to state-owned enterprises (SOEs) when conducting commercial activities in competition with private firms.

 

However, the Competition Act does not apply to the Government or any statutory body.

 

Neither the anti-competitive agreements prohibition nor the abuse of dominance prohibition apply to any undertaking entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly in so far as the prohibition would obstruct the performance, in law or in fact, of the particular tasks assigned to that undertaking.

 

The Competition Act also provides for certain exclusions/exemptions for specified activities covering: supply of ordinary letter and postcard services; supply of piped potable water; supply of wastewater management services; supply of scheduled bus services; supply of rail services; and cargo terminal operations. 

 

Extra-territorial application: The Competition Act is also applicable to firms located outside Singapore whose behaviours directly affect competition and consumers in domestic markets. The merger control provisions are also applicable to foreign mergers.

 

2. The Competition Commission of Singapore

 

The Competition Commission of Singapore (CCS) was established in 2005 under the Ministry of Trade and Industry. The main functions of the CCS are to eliminate and control practices having adverse effect on competition and promote a strong competitive culture and environment throughout the economy in Singapore.

 

Organisational structure of CCS: The CCS had 60 staff and a budget of SGD 16.3 million in 2016.

 

The CCS has 6 divisions, namely Business and Economics Division, Corporate Affairs Division, Legal Division, Enforcement Division, Policy and Markets Division, and International and Strategic Planning Division. 

 

The members of the Commission, including a Chairman and other commission members whose number is no less than 2 or more than 16, are appointed by the Minister. Currently there are 9 members.

 

Other regulators with competition powers: There are sector regulators that have exclusive authority in the enforcement of competition regulations in their specific sectors: Infocomm Development Authority (telecoms), Media Development Authority (media), Energy Market Authority (energy), and Civil Aviation Authority of Singapore (airport service).

 

In cross-sectoral competition cases, co ordination between the CCS and other regulators are made in accordance with the legal powers given to each regulator. Where there are cross-sectoral competition issues, they will be dealt with by CCS in consultation with the relevant sectoral regulators.

 

Competition advocacy: 

 

The CCS has as one of its functions that of advocating for competition. Although new public policies that may have implications for competition are not subject to a competition assessment in Singapore, government agencies are encouraged to take into account the potential impact on competition in their policy-formulation process.

 

A set of Guidelines on Competition Impact Assessment has been developed to assist government agencies in identifying and assessing the likely competitive impact of their proposed policies. 

 

CCS works closely with various government agencies to ensure that any new policies with implications for competition are assessed in terms of their potential impact on competition. This includes engaging government agencies on a systematic basis through a Community of Practice for Competition and Economic Regulations (COPCOMER), which serves as an inter-agency platform for the CCS and other government agencies and sector regulators to share experiences and exchange ideas on competition and regulatory issues.

 

International co operation: Singapore has competition chapters in a number of free trade agreements, such as the Peru-Singapore FTA, Australia-New Zealand FTA, EU-Singapore FTA (still under ratification), US-Singapore FTA and the Korea-Singapore FTA. The CCS also has an informal co operation framework specific to competition policy with the Australian Competition and Consumer Commission and the New Zealand Commerce Commission.

 

3. Investigation

 

Initiation of investigation: Under Section 62 of the Competition Act, the CCS has the power to investigate if there are reasonable grounds for the existence infringements of the prohibitions under the Competition Act. The investigation may be commenced based on a complaint or by the Commission’s own initiative.

 

Powers of investigation: Under Section 63, the CCS has the powers to require the production of a specified document or information which it considers relevant to the investigation. Under Section 64, the CCS has the power to enter premises without a warrant in connection with its investigation under Section 62. According to Section 64(2), the CCS must give a written notice of at least 2 working days. However, the CCS may enter the premises without giving a notice, if the CCS has reasonable grounds for suspecting that the premises are occupied by an undertaking which is being investigated in relation to Sections 34, 47 and 54, or has taken all reasonable steps to give notice but has not been able to do so.

 

Under Section 65, the CCS also has the powers to enter premises with a warrant issued by a court. In such as case, the CCS is granted the powers to use reasonable force to enter the premises, search any person on the premises, search the premises and take copies of or extract from, any relevant document, take possession of any relevant document. It may do so where inter alia “there are reasonable grounds for suspecting that — (i) there are on any premises documents which the Commission or the inspector has power under section 63 to require to be produced; and (ii) if the documents were required to be produced, they would not be produced but would be concealed, removed, tampered with or destroyed”.

 

Premises’ are defined in section 2(1) of the Act as not including domestic premises unless they are used in connection with an undertaking’s affairs or an undertaking’s documents are kept there, but includes any vehicle. 

 

Failure to comply with investigation: Where a person fails to comply with the request of the CCS during investigation (e.g. to provide documents or information, failing to comply with any condition imposed by an officer executing the search warrant for allowing any equipment or article to be retained on the premises instead of being removed), criminal sanctions may be imposed: a fine up to SDG 10,000 or to imprisonment up to 12 months or by both. The relevant offences are set out in sections 65 and 75 to 78 of the Act.

Procedural fairness: Where the CCS proposes to make an infringement decision based on Sections 34, 47 or 54 and upon completion of the investigation, the Commission gives prior written notice to a person affected and giving such person an opportunity to make representations before it.

 

Such persons will also be given a reasonable opportunity to inspect the CCS’ file save for internal documents and confidential information.

 

The CCS provides guidelines on investigative procedures, namely the CCS Guidelines on the Powers of Investigation and CCS Guidelines on Enforcement.

 

Confidentiality: The CCS is obliged to preserve the secrecy of information relating to the business, commercial or official affairs of any person, any matter identified as confidential by a person furnishing information and the identity of persons furnishing information to the CCS (Section 89). 

 

4. Remedies and sanctions

 

With respect to any infringement of Sections 34, 47 and 54, the CCS may issue directions under Section 69, as it considers appropriate, to parties to such agreement or conduct to bring the infringement to an end, take action to remedy, mitigate or eliminate any adverse effects of the infringement and to prevent the recurrence of such an infringement or circumstances.

 

Under Section 69, the CCS may impose financial penalty where the infringements under Sections 34, 47 and 54 have been committed intentionally or negligently. Sanctions are administrative in nature.

 

5. Appeal

Under Section 71, a decision of the CCS, including a direction or imposition of a financial penalty, may be appealed to the Competition Appeal Board (CAB).

 

The CAB is a separate body from the CCS and comprised of members (not more than 30) appointed by the Minister. The Minster appoints the Chairman of the CAB from persons qualified to be a Judge of the Supreme Court.

 

The CAB may confirm or set aside a decision of the CCS, remit the matter to the CCS or make any other decision (full review), including imposing or revoking or varying the amount of a financial penalty. A further appeal against the decision of the CAB may be made to the High Court and Court of Appeal. These appeals may only be respect points of law or the amount of financial penalty.

 

6. Private enforcement

 

Under Section 86, a person who suffers loss or damage as a result of an infringement under Sections 34, 47 or 54 may seek relief in civil proceedings in a court. This right of action may only be exercised after the CCS has made a decision of infringement and the appeal process has been exhausted