Cartels 2019 Comparisons

Last Updated July 11, 2019

Contributed By Drew & Napier LLC

Law and Practice

Authors



Drew & Napier LLC is a full-service law firm which has the oldest and largest dedicated competition law practice in Singapore. The practice, established six years before the enactment of the Competition Act (Cap 50B) in 2005, has grown in tandem with the development of both national and sectoral competition laws in Singapore. The experienced and highly qualified team of over 12 lawyers handles competition and regulatory matters both generally under the Competition Act as well as in the carved-out sectors such as telecommunications, media, energy and post. Since 1999, the practice has worked on every noteworthy competition law-related matter in the telecommunications, media and postal sectors. Drew & Napier is regularly commissioned by the Singapore competition regulators to undertake market studies and is the preferred counsel of many regional companies, multinational corporations, associations, government bodies and industry regulators, regularly assisting with a wide range of matters in Singapore and ASEAN member countries.

The Competition Act (Cap. 50B) (the 'Competition Act') is the primary competition legislation in Singapore. Section 34 of the Competition Act prohibits cartel activities ('Section 34 Prohibition'), namely in respect of “agreements between undertakings, decisions by associations of undertakings or concerted practices which have as their object or effect the prevention, restriction or distortion of competition within Singapore.”

The Competition and Consumer Commission of Singapore (the 'Commission') is the statutory body established on 1 January 2005 to administer and enforce the Competition Act, under the purview of the Ministry of Trade and Industry. With effect from 1 April 2018, the Commission also assumed responsibility for administering the Consumer Protection (Fair Trading) Act (Cap 52A).

While cartel matters are adjudicated by the Commission, its decisions can be appealed to the Competition Appeal Board (the 'Board'). In turn, a decision of the Board can be appealed to the High Court on a point of law arising from the decision, or from any decision in respect of the quantum of financial penalty imposed. See 4.8 Available Forms of Judicial Review or Appeal, below for details.

Where an infringement of the Section 34 Prohibition is found, pursuant to Section 69 of the Act, the Commission has general discretion to make any directions it considers appropriate to bring the infringement to an end and, where necessary, require action to be taken as specified in the direction to remedy, mitigate or eliminate any adverse effects of the infringement and to prevent its recurrence. A direction may require parties to:

  • modify or terminate the agreement that infringed the Section 34 Prohibition;
  • enter into legally enforceable agreements designed to prevent or lessen the anti-competitive effects which have arisen;
  • dispose of operations, assets or shares in undertakings in a manner specified by the Commission;
  • provide a performance bond, guarantee or other form of security on terms and conditions determined by the Commission; and/or
  • where the infringement is committed intentionally or negligently, pay a financial penalty determined by the Commission, which may not exceed 10% of a party’s business turnover in Singapore for each year of infringement, up to a maximum of three years.

While there is currently no criminal liability for cartel conduct per se, criminal liability may arise in the context of cartel investigations where, for example, undertakings or individuals obstruct the Commission in the performance of its duties or refuse to provide information requested pursuant to the Commission’s statutory powers.

Additionally, third parties that suffer loss or damage as a result of a competition law infringement will have a private right of action to seek relief through civil proceedings. Such rights will only arise:

  • after the Commission has made a decision that the Section 34 Prohibition has been infringed and the appeal period has expired; or
  • where an appeal has been brought, upon the determination of the appeal.

Private actions must be brought within two years of the date of the Commission’s decision or from the determination of the appeal, whichever is later. Relief may be in the form of an injunction or declaration, damages or other relief as the court deems fit.

There is no private right of action for challenging cartel behaviour or effects under the Competition Act. Potential infringements of the Competition Act are investigated and decided on by the Commission. However, complaints may be made to the Commission and a formal investigation may be launched if there are reasonable grounds for suspecting that there is an infringement of the Section 34 Prohibition.

Third parties may bring a private right of action to seek relief from parties responsible for engaging in cartel behaviour. See 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, above.

As stated in 1.1 Statutory Bases for Challenging Cartel Behaviour/Effects, Section 34 of the Competition Act prohibits “agreements between undertakings, decisions by associations of undertakings or concerted practices which have as their object or effect the prevention, restriction or distortion of competition within Singapore”. As Section 34(2) of the Competition Act illustrates, agreements may be considered to have the object or effect of preventing, restricting or distorting competition within Singapore if they:

  • directly or indirectly fix purchase or selling prices or any other trading conditions;
  • limit or control production, markets, technical development or investment;
  • share markets or sources of supply;
  • apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; or
  • make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations that, by their nature or according to commercial usage, have no connection with the subject of the contracts.

The illustrative list above is not intended to be exhaustive. As set out in the Commission’s Guidelines on the Section 34 Prohibition 2016, other examples of cartel activities include:

  • joint purchasing or selling;
  • agreements to share information;
  • exchanges of price information and/or non-price information;
  • agreements restricting advertising; and
  • standardisation agreements on technical or design standards.

In addition, the Section 34 Prohibition will apply only where agreements, decisions and concerted practices have, as their object or effect, the ‘appreciable’ prevention, restriction or distortion of competition.

The Commission considers that arrangements between competing undertakings involving price-fixing, bid-rigging, market-sharing or output limitation will always be considered, by their very nature, restrictive of competition to an appreciable extent.

In determining whether an agreement has the object of preventing, restricting or distorting competition, the Commission is not concerned with the subjective intention of the parties when entering into an agreement. Instead, it will determine if the Section 34 Prohibition has been breached based on the content and objective aims of the agreement considered in the economic context in which it is to be applied. The Commission will also consider the actual conduct and behaviour of the parties in the relevant market.

Notwithstanding this, an agreement will not be prohibited if it falls within an exclusion in the Third Schedule to the Competition Act, or if it meets all of the requirements specified in a block exemption order. The matters specified in the Third Schedule include, inter alia:

  • an undertaking entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly, insofar as the prohibition would obstruct the performance, in law or fact, of the particular tasks assigned to that undertaking;
  • an agreement which is made to comply with a legal requirement;
  • an agreement which is necessary to avoid conflict with an international obligation of Singapore, and which is subject to an order by the Minister for Trade and Industry (hereafter simply the 'Minister');
  • an agreement which is necessary for exceptional and compelling reasons of public policy, and which is subject to an order by the Minister;
  • any agreement that relates to any goods or services to the extent to which any other written law, or code of practice issued under any written law relating to competition, gives another regulatory authority jurisdiction in the matter;
  • the supply of ordinary letter and postcard services by a person licensed and regulated under the Postal Services Act (Cap 237A);
  • the supply of piped potable water;
  • the supply of wastewater management services, including the collection, treatment and disposal of wastewater;
  • the supply of bus services by a licensed bus operator under the Bus Services Industry Act 2015 (Act 30 of 2015);
  • the supply of rail services by any person licensed and regulated under the Rapid Transit Systems Act (Cap 263A);
  • cargo terminal operations carried out by a person licensed and regulated under the Maritime and Port Authority of Singapore Act (Cap 170A);
  • the clearing and exchanging of articles undertaken by the Automated Clearing House established under the Banking (Clearing House) Regulations; or
  • any activity of the Singapore Clearing Houses Association in relation to its activities regarding the Automated Clearing House.

The Section 34 Prohibition also does not apply to agreements or conduct that give rise to net economic benefit (as provided in the Third Schedule). For net economic benefit to be shown, the agreement or conduct must:

  • contribute to improving production or distribution, or promoting technical or economic progress;
  • not impose on the undertakings concerned restrictions that are not indispensable to the attainment of those objectives; and
  • not afford the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the goods or services in question.

Additionally, the Section 34 Prohibition does not apply to vertical agreements unless the Minister specifies otherwise by order (as set out in the Third Schedule). As of 1 May 2019, no such order has been made.

Certain liner shipping agreements are exempted from the application of the Section 34 Prohibition pursuant to a block exemption order (BEO) which first took effect on 1 July 2006 for a period of five years and has since been extended twice, until 31 December 2020. The liner shipping BEO remains the only BEO that has been granted in Singapore since the Competition Act came into force.

Notably, Section 33(4) of the Competition Act also provides that the substantive prohibitions will not apply to any activity carried on by, any agreement entered into 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.

There are no limitation period(s) applicable to a breach of the Section 34 Prohibition.

Section 33 of the Competition Act specifically states that the Commission may enforce infringements of the Section 34 Prohibition if conduct that takes place outside Singapore has the object or effect of preventing, restricting or distorting competition in a market within Singapore. In particular, Section 33 of the Competition Act specifies that that Section 34 of the Competition Act may apply, notwithstanding whether:

  • an agreement referred to in Section 34 has been entered into outside Singapore;
  • any party to such agreement is outside Singapore; or
  • any other matter, practice or action arising out of such agreement is outside Singapore.

Pursuant to Section 88 of the Act, the Commission is empowered to enter into arrangements with any foreign competition body with the approval of the Minister, whereby each party to such arrangements may: 

  • furnish to the other party information in its possession, if the information is required by that other party for the purpose of performance by it of any of its functions; and
  • provide any other assistance to the other party that will facilitate the performance by that other party of any of its functions.

In entering into any such arrangement, Section 88 of the Competition Act requires the Commission to adopt certain precautions relating to the subsequent disclosure of any information provided, including obtaining a written undertaking from the counterparty. As of 1 May 2019, the Commission has entered into a memorandum of understanding to facilitate co-operation on competition enforcement with Indonesia’s Commission for the Supervision of Business Competition, as well as a memorandum of co-operation with Japan’s Fair Trade Commission on cross-border enforcement.

It should also be noted that the Commission has joined the International Competition Network’s Framework on Competition Agency Procedures (the 'Framework') as a founding member on 16 May 2019. The Framework promotes several basic and non-binding principles designed to facilitate procedural fairness and transparency among participating competition agencies, in addition to fostering closer co-operation between participating agencies through dialogues to better understand each other’s processes. Given its recent introduction, the Framework has not yet been tested or utilised in any of the Commission’s investigations or enforcement cases.

In practice, parties generally become aware of the Commission’s investigations against them for a potential infringement of the Section 34 Prohibition in one of two ways.

On the one hand, the Commission may serve a formal notice pursuant to Section 63 of the Act, requiring the production of information or documents specified in the notice. The notice will set out the subject matter and purpose of the investigation, and outline the nature of the offences that may be committed if a person fails to comply with the notice. It is not uncommon for multiple formal notices to be issued by the Commission either to the infringing parties or any other parties that might have information that is relevant to the investigation.

The written notice may also designate a time and place at which a document or information must be produced and the manner and form in which it is to be produced. If information is provided, it may be recorded or reduced into writing by the Commission’s officers. The person providing the information will be given an opportunity to amend, add to or delete from the written record before signing it. If a document is produced, the Commission may require an explanation of the document to be provided as well. The Commission will generally not ask for more documents or information than what it believes is necessary for the investigation as at the date of the written notice.

On the other hand, the Commission may conduct unannounced searches (also known as dawn raids) of business premises. See 2.2 Dawn Raids to 2.5 Procedure of Dawn Raids, below for further details.

The Commission may conduct dawn raids under a warrant pursuant to Section 65 of the Act, where there are reasonable grounds for suspecting that the premises hold relevant documents that would be concealed, removed, tampered with or destroyed if the Commission had requested their production through a formal notice. It should be noted that the Commission may also enter premises without a warrant under Section 64 of the Act, although in this case, it is required to provide written notice at least two working days in advance of its intended entry, and it will not have the ability to actively search the premises.

Where the Commission conducts a search of the premises under warrant, the Commission’s officers will normally arrive at the premises during office hours. If there is no one at the premises, the Commission’s officers will take reasonable steps to inform the occupier of the intended entry. The occupier, along with a legal representative, will be given a reasonable opportunity to be present when the warrant is executed.

It should be noted that where the occupier’s legal representative is given a reasonable time to arrive at the premises, the Commission’s officers may impose conditions that are deemed appropriate, which may include the sealing of cabinets, keeping business records in the same state and places as when entry into the premises was effected, suspending external email, and allowing the Commission’s officers to occupy selected offices. Otherwise, if the occupier has an in-house legal representative on the premises, the Commission’s officers will not wait for an external legal representative to arrive.

In general, a warrant to conduct searches may only be granted if the court is satisfied that there are reasonable grounds for suspecting that within the premises to be searched:

  • there are documents which have been required to be produced under Sections 63 (by written notice) or 64 (in the course of an investigation without a warrant) of the Act, and which not have been produced;
  • there are documents which an investigating officer, authorised person, inspector or person required by the inspector could have required to be produced under Section 64, but was unable to effect entry into the premises; or
  • there are documents which would be concealed, removed, tampered with or destroyed if the Commission were to require their production under Section 63.

If a warrant is granted by the courts, the warrant may permit the Commission’s officers to do all or any of the following:

  • enter the premises and use such force as is reasonably necessary for the purpose of gaining entry;
  • search any person on the premises if there are reasonable grounds for believing the person has in his or her possession any document, equipment or article that has a bearing on the investigation;
  • search the premises and take copies or extracts from any document appearing to be the kind in respect of which the warrant was granted;
  • take possession of any document appearing to be the kind in respect of which the warrant was granted if necessary for preserving the document or prevent tampering, or if it is not reasonably practicable to take copies of the document on the premises;
  • take any other step necessary in order to preserve the documents or prevent interference with them, including the sealing of premises, offices or files;
  • require any person to provide an explanation of any document appearing to be the kind in respect of which the warrant was granted or state to the best of his or her knowledge where it could be found;
  • require any person on the premises to produce any document of the relevant kind at such location, time, and in the form and manner required by the Commission;
  • require any information stored in electronic form to be produced in a form which it could be taken away and read; and
  • remove from the premises any equipment or article that relates to any matter relevant to the investigation (eg, computers).

Whilst the Commission’s powers under the warrant appear to be broad, a significant caveat is that the Commission’s power to require the disclosure of information or documents under the Competition Act does not extend to any communication that would be protected in disclosure in court proceedings on the grounds of legal advice privilege or litigation privilege. Please see 2.12 Attorney-client Privilege, below.

It should also be noted that where the Commission’s officers intend to enter premises without a warrant, the Commission’s officers may nonetheless require:

  • any person on the premises to produce any document that the Commission’s officers consider to be related to any matter relevant to the investigation, for example, minutes of any meetings with competitors, the diaries of specified directors, sales data or invoices;
  • any person on the premises to provide an explanation of any document produced;
  • any person to state, to the best of that person’s knowledge and belief, the location of any document that the Commission’s officers consider to be related to any matter relevant to the investigation;
  • any information which is stored in any electronic form and is accessible from the premises that the Commission’s officers consider to be related to any matter relevant to the investigation, to be produced in a form in which it can be read and can be taken away; and
  • the taking of any other steps which appear necessary in order to preserve the documents or prevent interference with them, for example, sealing such rooms or cabinets for such time as is reasonably necessary to enable the inspection to be completed. This time period will not be for longer than 72 hours, except where an undertaking consents to a longer time or where access to documents is unduly delayed, such as by the unavailability of a person who can provide access.

The Competition Act contains certain offences relating to non-compliance or non-co-operation with the Commission’s investigations, in particular where a person:

  • refuses to provide information pursuant to a requirement for him or her to do so;
  • destroys or falsifies documents;
  • provides false or misleading information; or
  • obstructs a Commission officer in the discharge of his or her duties.

A person who is convicted of an offence in relation to the above may be sentenced to a term of imprisonment not exceeding 12 months, a fine not exceeding SGD10,000, or both. To date, criminal sanctions relating to an offence described above have not been imposed in any case in Singapore.

See 2.1 Initial Investigatory Steps to 2.3 Restrictions on Dawn Raids, above on the procedure for dawn raids.

Under the Competition Act, the Commission is empowered to interview occupants who are on the premises being inspected, without having to serve a written notice under Section 63 of the Act. The Commission’s officers may require individuals to answer any question relating to the investigation, and any information provided verbally must be put in writing, be read over to the individual, and after correction (if any), be signed by the individual. If the individual does not understand English, the information recorded will be interpreted in a language that the individual understands.

Legal counsel (whether in-house or external) may play a role in the investigations process. For instance, where the Commission issues a written notice to require the production of documents or information under Section 63 of the Act, legal advice may be sought in relation to the notice. A person required by the Commission to provide information or an explanation of a document may also be accompanied by legal counsel, although it should be noted that the individual must be the person responding and the Commission has stated that it is not acceptable for another person to respond on that individual’s behalf. In addition, where the Commission conducts a search of the premises under warrant, the occupier’s legal counsel may be given a reasonable amount of time to arrive at the premises under certain circumstances (see 2.2 Dawn Raids, above).

Generally, cartel involvement does not give rise to liability for individuals (such as employees or officers of the entity under investigation). In such a situation, representation would be at the corporate level. However, where individuals commit one of the ancillary offences relating to the obstruction of the Commission’s investigations, individuals may consider obtaining legal representation in relation to any subsequent criminal proceedings brought against them.

In practice, legal counsel should inform all officers and employees of the undertaking under investigation of the legal requirements to co-operate with the Commission’s officers, with particular emphasis on ensuring that there should be no attempts to delete, destroy or conceal information or documents that may be relevant to the investigation. Legal counsel should also ensure that officers and employees do not disclose the fact that the undertaking is under investigation and/or a dawn raid has taken place to other third parties, and in particular to other undertakings that may potentially be the subject of the Commission’s investigations.

The Commission may issue a notice under Section 63 of the Competition Act to require the production of specified documents or to provide specified information, or to enter any premises to gain access to documents, either with or without a warrant.

See 2.1 Initial Investigatory Steps to 2.3 Restrictions on Dawn Raids, above for further details.

Apart from issuing a notice under Section 63 of the Competition Act to require the provision of specified information, which may be given orally, the Commission’s officers may also interview any person on the premises which are under inspection.

See 2.1 Initial Investigatory Steps to 2.5 Procedure of Dawn Raids, above for further details. 

In general, a company/individual is obliged to provide documents or information relating to the subject matter of the investigations, notwithstanding that the information is located in other jurisdictions or stored in electronic form in the ‘cloud’. See 2.4 Spoliation of Information, above in respect of the penalties which may be imposed for non-compliance with the Commission’s investigations.

As mentioned in 2.3 Restrictions on Dawn Raids, above, the Commission’s power to require the disclosure of information or documents under the Competition Act does not extend to any communication that would be protected in disclosure in court proceedings on the grounds of legal professional privilege or litigation privilege. Section 66(3) of the Competition Act also provides that a professional legal adviser is not required to disclose or produce privileged communications made by them in that capacity.

In general, advice provided by in-house counsel is also protected by legal professional privilege under the Evidence Act (Cap 97). This was affirmed in the Commission’s Guidelines on the Power of Investigation in Competition Cases 2016, which stated that “communications with in-house lawyers, in addition to lawyers in private practice including foreign lawyers, can benefit from the privilege.”

Section 66(2) of the Competition Act provides a saving provision in respect of statements that may tend to incriminate individuals. Where an individual claims, in advance of making any statement disclosing information, that the statement may tend to incriminate him or her, the statement shall not be admissible as evidence against him or her in criminal proceedings, other than in respect of the offences set out in proceedings under Part V of the Competition Act (see 5.4 Admissibility of Evidence Obtained from Governmental Investigations/Proceedings, below). Notwithstanding this, these statements may be used by the Commission in its investigations and enforcement and remain admissible as evidence in civil proceedings, including proceedings under the Competition Act (see 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, above and 5.1 Private Right of Action, below).

As mentioned in 2.4 Spoliation of Information, above, the Competition Act provides for offences in relation to the obstruction of the Commission’s investigation efforts, which carry a sentence of imprisonment, a fine or both. Further, certain forms of non-co-operation, such as an unreasonable failure by an undertaking to respond to a request for financial information on business turnover and/or relevant turnover, may be considered by the Commission as an aggravating factor in determining the appropriate amount of financial penalty to be imposed, where relevant.

Parties cannot refuse to provide information or documents on the basis that they are confidential. However, parties are allowed to claim confidentiality over any information that they furnish to the Commission and Section 89 of the Competition Act protects such confidential information (subject to certain statutory exceptions) by requiring the Commission’s officers and other specified parties handling such information to preserve and aid in the preservation of secrecy concerning all matters relating to the business, commercial or official affairs of any person.

Counsel may raise legal and factual arguments to persuade the Commission to forgo taking action in the form of response to inquiries by the Commission or by proactive engagement with the Commission during the course of an investigation.

During the Commission’s investigations, and before the Commission makes a decision as to whether the Section 34 Prohibition has been infringed, entities under investigation may come forward to voluntarily offer legally binding commitments to address the competition concerns which are identified in the course of investigations. The Commission will cease its investigations if it accepts these commitments. Legally binding commitments can be enforced by the Commission through the courts under Section 85 of the Act. While it is not stipulated in the Act, defence counsel may play a role in this process in advising the relevant entity under investigation on the offering of legally binding commitments.

Under the Commission’s leniency programme, an undertaking that applies for leniency may be granted the benefit of total immunity from financial penalties if it:

  • is the first to provide the Commission with evidence of the cartel activity before an investigation has commenced, provided that the Commission does not already have sufficient information to establish the existence of the alleged cartel activity;
  • provides the Commission with all the information, documents and evidence available to it regarding the cartel activity;
  • grants an appropriate waiver of confidentiality to the Commission in respect of other jurisdictions and regulatory authorities which have been notified of the conduct and/or from whom leniency has been sought;
  • unconditionally admits liability to the conduct for which leniency is sought;
  • maintains continuous and complete co-operation throughout the investigation and until the conclusion of any action by the Commission arising as a result of the investigation;
  • refrains from further participation in the cartel activity from the time of disclosure of the cartel activity to the Commission (except as may be directed by the Commission);
  • is not responsible for initiating the cartel; and
  • has not taken any steps to coerce another undertaking to take part in the cartel activity.

After the Commission has commenced an investigation, any reduction in the level of financial penalty will be at the Commission’s discretion. The first party that provides information to the Commission about the cartel that is sufficient for it to issue an infringement decision can receive lenient treatment, by way of a reduction of up to 100% in the level of the financial penalties. Subsequent applicants may benefit from a reduction in financial penalties of up to 50%.

In addition, the leniency programme in Singapore is also supplemented by a marker system and a Leniency Plus system.

The marker system is available to undertakings that are not immediately able to provide all the information, documents and evidence regarding the cartel activity, provided that the Commission has not announced its intention to make a decision. An applicant that obtains a marker will secure a position in the queue for immunity or a reduction in the financial penalty of up to 100%, while the Commission grants the applicant a limited period of time to gather the necessary information, documents and evidence. If the applicant is unable to perfect the marker by providing the necessary information, documents and evidence within the time period specified, extensions may be granted by the Commission on a case-by-case basis. If the applicant fails to perfect the marker, the next applicant in the marker queue will be eligible to obtain immunity or a reduction in the financial penalty of up to 100%. Once the marker has been perfected, the other applicants in the marker queue will be informed that they no longer qualify for full immunity or a 100% reduction in financial penalties.

Under the Commission’s Leniency Plus system, a party that is involved in completely separate cartel activities in two different markets may, if it were to provide information in respect of cartel activity in the second market, benefit from additional reductions in the financial penalties imposed on it in the first market. To be clear, the party does not need to be in receipt of leniency in respect of the first market to receive this reduction, and it may benefit from lenient treatment in respect of its cartel activity in the second market as well.

In general, company employees may be required to provide information (including an explanation of any document provided) to the Commission pursuant to a notice issued by the Commission under Section 63 of the Act. Employees may also be interviewed by the Commission’s officers during an inspection of the company’s premises. See 2.1 Initial Investigatory Steps to 2.5 Procedure of Dawn Raids, above on the Commission’s powers of investigation.

The Commission may generally obtain documents and information from the company under investigation pursuant to the issuance of a written notice under Section 63 of the Competition Act, and/or by entering the premises and conducting a search for such information under Sections 64 and 65 of the Competition Act. See 2.1 Initial Investigatory Steps to 2.5 Procedure of Dawn Raids, above on the Commission’s powers of investigation.

Section 63 of the Competition Act empowers the Commission to request information from any person pursuant to a written notice. Whilst the Competition Act does not specify how the notice may be issued in respect of companies or individuals located outside the jurisdiction, the same penalties in respect of any non-compliance with the Commission’s investigations will apply.

Where there are cross-sectoral competition matters involving an industry which is separately regulated by industry-specific regulators (eg, telecommunications, media, post, gas and electricity), the Commission will work with the relevant regulator to determine which agency is best placed to handle the matter in accordance with statutory powers. The lead will be taken by the agency which is best placed in terms of its ability to investigate the alleged anti-competitive conduct and impose any necessary remedies.

See 1.7 Principles of Comity, above on the Commission’s ability to enter into arrangements with other foreign competition authorities.

Separately, the Commission has also publicly acknowledged that there has been at least one occasion on which it has co-ordinated with overseas competition authorities on conducting dawn raids. Further, an appropriate waiver of confidentiality in respect of other regulatory authorities that have been informed of the conduct must be granted by an applicant seeking leniency from the Commission, so that the Commission may communicate with such authorities for the purposes of its investigations.

As noted in 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, above, there is no criminal liability for infringements of competition law in Singapore, except in respect of the ancillary offences relating to the failure to comply or co-operate when the Commission exercises its powers of investigation. Such offences will be tried in the District Court, which has the power to impose the full penalty or punishment in respect of the offences.

The Commission is the primary agency responsible for initiating an investigation and issuing a decision as to whether the Section 34 Prohibition has been infringed in the first instance. Please see 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, above on the Commission’s powers of investigation.

Where the Commission concludes, following the completion of investigations, that the parties have infringed the Section 34 Prohibition, the Commission will issue a Proposed Infringement Decision (PID). The PID is a written notice setting out the basis of the Commission’s decisions, which will only be issued to the parties concerned. The parties concerned will be given an opportunity to make representations to the Commission and present any other information for the Commission’s consideration before the Commission finalises its decision. Parties will also be given the opportunity to inspect the documents in the Commission’s file which were relied on in its assessment. The Commission may withhold any documents to the extent that they contain confidential information or are internal documents. After the Commission has considered the parties’ representations, it will finalise its infringement decision, which will set out the penalties and other remedies to be imposed, if any. 

It is understood that the Commission’s infringement decision on an infringement of the Section 34 Prohibition will be issued in respect of all parties who have participated in the cartel. 

The civil standard of proof, namely proof on the balance of probabilities, will apply to the Commission’s determination of whether there has been an infringement of the Section 34 Prohibition. The civil standard will also apply in appeals against the Commission’s decision, which may be heard by the Board or the relevant appellate court.

The Commission is responsible for investigating an infringement of the Section 34 Prohibition and applying the relevant legal analysis to the facts of the matter in its assessment, in order to arrive at its decision.

The Commission may undertake several investigations at the same time and, as such, require information to be provided for multiple investigations as long as the information requested falls with the scope of the investigations.

Leniency applicants are required to provide a waiver to the Commission which enables it to share information with other authorities from which leniency is sought.

Whilst the substantive provisions of the Evidence Act (Cap 97) apply to all judicial proceedings in or before any court (except for proceedings before an arbitrator or to affidavits presented to any court or officer), the Evidence Act is silent on the application of rules of evidence to administrative proceedings such as the Commission’s investigations and enforcement. Save for the specific provisions on privileged communications and information and the admissibility of statements relating to self-incrimination, the Competition Act is also silent on the rules of evidence applicable to the Commission’s enforcement of the Competition Act.

In practice, however, and as set out in the Commission’s guidelines, the Commission has broad powers to require the production of documents and information necessary for the Commission’s investigations. To this end, the Commission will generally consider all relevant information before it in arriving at its decision as to whether there is an infringement of the Section 34 Prohibition.

The Commission comprises several divisions employing officers from various fields of expertise. In particular, the Legal and Business and Economics divisions of the Commission comprise officers who are able to provide expert economic and legal analyses to competition and consumer cases, to ensure that the detection, investigation, decision and enforcement processes are fair, thorough and robust.

In addition, where parties intend to make an application to the Commission for guidance or decision on whether the agreement or conduct infringes the Section 34 Prohibition, they may require the assistance of experts in substantiating certain information required to be included in an application to the Commission, for example, a definition of the relevant product and geographic markets.

See 2.12 Attorney-client Privilege and 2.13 Other Relevant Privileges, above.

The Commission may undertake several investigations at the same time based on the same or related facts.

The Competition Act gives the Commission the power to enforce the Section 34 Prohibition. Where the Commission has made a decision finding that the Section 34 Prohibition has been infringed, the Commission may issue directions to the persons concerned as it considers appropriate to bring the infringement to an end. Directions may require modification or termination of the agreement or conduct, periodic reporting to the Commission on certain matters, and may even require undertakings to make structural changes to their business, where appropriate. The Commission is not limited to giving directions to the infringing parties.

In general, directions will take effect immediately in most cases, unless the Commission provides for a period of time within which to comply with a direction. An appeal to the Board or a relevant appeal court will not operate to suspend a direction, unless an interim order is made by the Board or the relevant appeal court.

In addition, the Competition Act provides that the Commission has the discretion to give a direction imposing a financial penalty on any party that has intentionally or negligently infringed the Section 34 Prohibition. The imposition of financial penalties is to reflect the seriousness of the infringement and to serve as an effective deterrent.

The amount of the penalty imposed may be up to 10% of the turnover of the undertaking’s business in Singapore for each year of infringement, up to a maximum of three years. The Commission has considered that intention or negligence relate to the facts, and not the law. This means that ignorance or a mistake of law is no bar to a finding of intentional or negligent infringement.

As noted in 2.16 Procedure for Defence Counsel to Raise Arguments Against Enforcement, entities under investigation may come forward at any time during the Commission’s investigations, and before the Commission makes a decision as to whether the Section 34 Prohibition has been infringed, to offer voluntarily legally binding commitments to address the competition concerns which are identified by the Commission. The Commission will cease its investigations if it accepts these commitments. Legally binding commitments can be enforced by the Commission through the courts under Section 85 of the Act.

Separately, the Commission has a ‘fast-track’ procedure to expedite the investigative timeframe for cases involving the infringement of the Section 34 prohibition, which is detailed in the Commission’s Practice Statement on the Fast Track Procedure for Section 34 and Section 47 Cases (Practice Statement). Under this procedure, parties who admit liability for their infringement will be eligible for a fixed percentage reduction in the amount of financial penalty that they are directed to pay pursuant to Section 69(2)(d) of the Act. This procedure is not mutually exclusive from the leniency regime and it is possible for a leniency applicant to benefit from discounts arising from both leniency and the fast-track procedure.

Notwithstanding the parties’ willingness to participate in the fast-track procedure, the Commission retains a broad discretion to determine whether the procedure would be suitable for the case under investigation. The Commission has considered that it would initiate the fast-track procedure before the issuance of a proposed infringement decision, and where the Commission is reasonably satisfied that the evidentiary standard of proof has been met such that the Commission would be prepared to issue a proposed infringement decision. It is understood that parties to such a procedure may not disclose any information received from their participation in this procedure to other third parties, except with prior authorisation from the Commission.

Any person who suffers loss or damage directly as a result of an infringement of the Section 34 Prohibition has a right of action for relief in civil proceedings in a court against any undertaking which is or which has at the material time been a party to the infringement. It should be noted, however, that no private action may be brought under the Competition Act until the Commission has issued an infringement decision and all avenues of appeal have been exhausted.

As noted in 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, above, there is no criminal liability for infringements of competition law in Singapore, except in respect of the ancillary offences relating to the failure to comply or co-operate when the Commission exercises its powers of investigation.

See 4.1 Imposition of Sanctions, above on the Commission’s ability to impose sanctions for infringements of competition law.

As noted in 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, above and 5.1 Private Right of Action, below, private individuals only have a right to seek relief from the courts against parties found to have infringed competition law, which may be in the form of an injunction or declaration, damages or such other relief as the court deems fit.

The Commission has stated in its Guidelines on the Appropriate Amount of Penalty in Competition Cases 2016 that the financial penalty may be reduced where the Commission considers there are mitigating factors, which include the existence of any compliance programme. In considering how much mitigating value should be accorded to the existence of any compliance programme, the Commission will take into account whether:

  • there are appropriate compliance policies and procedures in place;
  • the programme has been actively implemented;
  • it has the support of, and is observed by, senior management;
  • there is active and ongoing training for employees at all levels; and
  • the programme is evaluated and reviewed at regular intervals.

There are no provisions requiring mandatory consumer redress for a breach of the Section 34 Prohibition in the Competition Act. As noted in 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, above and 5.1 Private Right of Action, below, individuals have private rights of action to seek redress in court from parties who have been found by the Commission to have infringed the Section 34 Prohibition.

As noted in 1.2 Public Enforcement Agencies and Scope of Liabilities, Penalties and Awards, above, appeals in respect of the Commission’s decisions can be made to the Board, which is an independent body established under Section 72 of the Act. The Board’s powers and procedures are set out primarily in Section 73 of the Competition Act and the Competition (Appeals) Regulations.

In general, parties to an agreement or persons whose conduct in respect of which the Commission has made a decision finding an infringement of the Section 34 Prohibition may appeal against that decision, the imposition of or the amount of any financial penalty, or any directions issued. There is no right to appeal to the Board against the Commission’s refusal to accept any commitments offered, but appeals may be made against the Commission’s refusal to vary, substitute or release existing commitments.

Procedurally, appeals are made by lodging a notice of appeal, in accordance with the Competition (Appeals) Regulations, within two months from the date of the Commission’s decision. Thereafter, the Commission has six weeks to file its defence. The Board may determine the procedure and timetable of the appeal, which is usually done through holding a case management conference with the parties. The Board has broad powers to make such directions it thinks fit to determine the just, expeditious or economical conduct of the appeal proceedings.

In respect of the outcome, the Board can confirm, impose, revoke or vary a direction, or make any other direction or decision, as long as it is a decision or direction that the Commission itself could have given. On the merits of the appeal, the Board will apply the civil standard of proof, namely proof on the balance of probabilities, which the Board has previously applied in the Express Bus Operators case.

Further appeals against the Board’s decisions to the High Court may be made on a point of law arising from a decision of the Board, 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 the Rules of Court (Cap 322). Parties may also appeal High Court decisions to the Court of Appeal. There is no further appeal right from the Court of Appeal.

As of 1 May 2019, 19 appeals have been filed to the Board, of which six are in progress, two withdrawn and the remainder completed. To date, no further appeals have been made against the Board’s decisions.

Third parties, including firms and individuals, may have a private right of action under Section 86 of the Act. As stated in 1.3 Private Challenges of Cartel Behaviour/Effects, above, such a right of private action is premised on an infringement finding by the Commission, and may only be brought within two years following the expiry of any applicable periods. To date, there is no record of any such proceedings being brought in Singapore with respect to competition-related matters.

As of 1 May 2019, the Singapore civil litigation system only provides for group litigation in the form of a representative action (under Order 15, Rule 12 of the Rules of Court). A representative action can only be brought if the representative claimant demonstrates to the court’s satisfaction that all the claimants have the ‘same interest’ in the proceedings, and subject to the court’s discretion to allow the case to proceed. However, notwithstanding the fact that representative actions may be brought, it would still be necessary for claimants to demonstrate that they have suffered loss directly.

Whilst questions of indirect purchasers and ‘passing-on’ defences have yet to be considered in Singapore, it should be noted that only persons who suffer loss or damage directly as a result of an infringement of the Section 34 Prohibition may bring a private action under the Competition Act.

Discovery requirements under the Rules of Court will likely apply to evidence from the Commission’s investigations.

As of 1 May 2019, there have not been any claims brought by individuals in the exercise of their private rights of action in respect of a violation of the Section 34 Prohibition, nor have there been any publicly available details relating to any out-of-court settlements.

In general, 'costs follow the event' for most civil actions in Singapore. This means that the costs of an action (which may include fees, charges, disbursements, expenses and remuneration) are usually awarded to successful litigants, although any award of costs is subject to the court’s discretion.

Please see 5.6 Compensation of Legal Representatives, above.

In general, the normal avenues of appeal applicable to civil cases would apply. As noted in 5.5 Frequency of Completion of Litigation, to date there is no record of any claims brought by individuals in the exercise of their private rights of action.

The Commission publishes all its decisions on cartel conduct and appeal decisions of the Board are also published.

To date, the Commission has published 12 Guidelines, one Practice Statement, and one Guidance Note on various topics in relation to the Act, which are available at https://www.cccs.gov.sg/legislation/competition-act. The following guidelines may be particularly pertinent to cartel conduct and enforcement:

  • Guidelines on the Section 34 Prohibition 2016;
  • Guidelines on Powers of Investigation in Competition Cases 2016;
  • Guidelines on Enforcement of Competition Cases 2016;
  • Guidelines on Lenient Treatment for Undertakings Coming Forward with Information on Cartel Activity 2016;
  • Guidelines on Filing Notifications for Guidance or Decision with respect to the Section 34 Prohibition and Section 47 Prohibition 2016; and
  • Guidelines on the Appropriate Amount of Penalty in Competition Cases 2016.
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Drew & Napier LLC is a full-service law firm which has the oldest and largest dedicated competition law practice in Singapore. The practice, established six years before the enactment of the Competition Act (Cap 50B) in 2005, has grown in tandem with the development of both national and sectoral competition laws in Singapore. The experienced and highly qualified team of over 12 lawyers handles competition and regulatory matters both generally under the Competition Act as well as in the carved-out sectors such as telecommunications, media, energy and post. Since 1999, the practice has worked on every noteworthy competition law-related matter in the telecommunications, media and postal sectors. Drew & Napier is regularly commissioned by the Singapore competition regulators to undertake market studies and is the preferred counsel of many regional companies, multinational corporations, associations, government bodies and industry regulators, regularly assisting with a wide range of matters in Singapore and ASEAN member countries.

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