CPL2: Competition Act: Section 34

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Questions and Answers

In the context of Singapore's Competition Act 2004, which of the following scenarios most definitively contravenes Section 34 concerning anti-competitive agreements 'by object'?

  • Competing pharmaceutical companies concurrently announce identical price increases for a non-patented essential drug, citing rising raw material costs and supply chain disruptions.
  • Leading construction companies in Singapore enter into a pact to divide upcoming public infrastructure projects geographically, ensuring each secures a predetermined share of the market. (correct)
  • Several boutique hotels in a locality decide to jointly promote the region as a tourist destination, sharing marketing costs and visitor data, leading to a marginal increase in average room rates.
  • Two major telecommunication firms agree to standardize network protocols to enhance interoperability, inadvertently creating higher barriers to entry for nascent competitors.

Under Singapore's Section 34 Prohibition, an agreement between undertakings will invariably escape scrutiny if the parties involved are in a vertical, rather than horizontal, relationship, irrespective of the agreement's demonstrable anti-competitive effects.

False (B)

Critically evaluate the evidentiary threshold required by the Competition and Consumer Commission of Singapore (CCCS) to establish a violation of Section 34 based on 'anti-competitive effect,' as distinguished from 'anti-competitive object'.

To establish a Section 34 violation based on 'anti-competitive effect,' the CCCS must demonstrate that the agreement, while not inherently anti-competitive in objective, demonstrably prevents, restricts, or distorts competition within Singapore. This necessitates a detailed market analysis to prove actual or likely appreciable adverse effects on competition, contrasting with 'by object' infringements where anti-competitive intent is presumed, requiring less direct proof of impact.

According to prevailing interpretations of Section 34, mere _________ by an undertaking in a meeting with an anti-competitive purpose, without explicit and demonstrable disassociation, can be construed as tacit approval and thus a violation.

<p>participation</p> Signup and view all the answers

Match the following types of information exchange with their relative risk of contravening Section 34 of Singapore's Competition Act:

<p>Organised exchange of sensitive data (prices, discounts) = Highest Risk Occasional exchange of sensitive data = Medium-High Risk Exchange of historical data that cannot influence future market behaviour = Low Risk Exchange of data in the public domain = Negligible Risk</p> Signup and view all the answers

Consider a scenario where two ostensibly independent companies, operating in a downstream retail market, utilize a common upstream manufacturer. If these retailers engage in concerted practices regarding pricing strategy, which of the following best characterizes the nature of potential Section 34 infringement?

<p>Primarily a horizontal agreement infringement, notwithstanding the vertical element. (C)</p> Signup and view all the answers

Information sharing agreements are per se legal under Singaporean Competition Law if the exchanged data is exclusively non-price related, such as historical sales volumes or aggregated market trends.

<p>False (B)</p> Signup and view all the answers

Articulate the 'Net Economic Benefit Exclusion' under Singapore's Competition Act and discuss the critical factors that undertakings must demonstrate to successfully invoke this exclusion against a Section 34 Prohibition.

<p>The 'Net Economic Benefit Exclusion' (Paragraph 9 of the Third Schedule) exempts agreements from Section 34 Prohibition if they generate net economic benefits. To invoke this, undertakings must prove the agreement contributes to improving production or distribution, or promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and not imposing restrictions indispensable to achieving these objectives, nor eliminating competition substantially.</p> Signup and view all the answers

In the context of bid-rigging, '_________ pricing' is a collusive tactic where a designated bidder submits a deliberately high bid to ensure a pre-selected competitor wins the auction.

<p>cover</p> Signup and view all the answers

Which of the following information exchanges between competitors is LEAST likely to be scrutinized under Section 34 of Singapore's Competition Act?

<p>Publicly available aggregated industry sales statistics published by a recognized market research firm. (D)</p> Signup and view all the answers

Under Section 34, agreements aimed at standardizing product dimensions across an industry sector are automatically deemed anti-competitive due to their potential to limit product differentiation and innovation.

<p>False (B)</p> Signup and view all the answers

Explain the concept of 'hub-and-spoke' practices in the context of anti-competitive agreements and analyze how such arrangements can violate Section 34, particularly concerning vertical and horizontal dimensions.

<p>'Hub-and-spoke' practices involve a central 'hub' (often a common supplier or platform) facilitating collusion between ostensibly independent 'spokes' (competitors). Though seemingly vertical, they can create horizontal anti-competitive effects if the hub serves as a conduit for exchanging sensitive information or coordinating strategies among competitors, violating Section 34 by restricting competition at the horizontal level.</p> Signup and view all the answers

Agreements that involve allocating geographical areas or categories of consumers/services are classified as _________ sharing, a type of hardcore conduct under Section 34.

<p>market</p> Signup and view all the answers

In assessing whether an information exchange has an 'appreciable adverse effect on competition,' which factor would the CCCS likely consider MOST critical?

<p>The demonstrable reduction or removal of uncertainties inherent in the process of competition. (C)</p> Signup and view all the answers

For an agreement to be considered 'anti-competitive by object' under Section 34, it is mandatory for the CCCS to prove that the parties explicitly intended to restrict competition; absence of demonstrable intent negates 'by object' classification.

<p>False (B)</p> Signup and view all the answers

Discuss the implications of the phrase 'regardless of the subjective intent of the parties for any reason!' in the context of hardcore restrictions under Singapore's Section 34.

<p>This phrase underscores that the prohibition of hardcore restrictions, such as price-fixing or market sharing, is absolute and not contingent on the motivations or justifications offered by the undertakings. Even if parties claim benign intentions or pro-competitive rationales, agreements classified as hardcore 'by object' are automatically deemed illegal.</p> Signup and view all the answers

In the EBAA case, the Express Bus Agencies Association was found to have engaged in price-fixing by establishing _________ selling prices and coordinating fuel and insurance charges.

<p>minimum</p> Signup and view all the answers

Which scenario most accurately exemplifies 'bid-suppression' in the context of anti-competitive bid-rigging?

<p>One bidder agrees to withdraw a genuinely competitive bid to allow a pre-selected competitor to win. (D)</p> Signup and view all the answers

Under Singaporean Competition Law, concerted practices, unlike formal agreements, are immune to Section 34 Prohibition due to their informal and non-binding nature.

<p>False (B)</p> Signup and view all the answers

Contrast 'price-fixing' with 'information sharing' as categories of anti-competitive agreements under Section 34, highlighting the distinct legal and economic considerations for each.

<p>Price-fixing is a 'by object' hardcore restriction, directly manipulating price competition and presumed illegal. Information sharing, while not always 'by object,' can be 'by effect' if it reduces market uncertainty, requiring a nuanced economic analysis to determine appreciable adverse effects on competition. Price-fixing is per se unlawful; information sharing requires contextual assessment of its competitive impact.</p> Signup and view all the answers

Output limitation, another form of hardcore conduct, directly restricts competition by _________ production levels or use of quotas.

<p>fixing</p> Signup and view all the answers

In the CCCS 700/002/14 case involving hotels, the infringement was primarily based on the exchange of:

<p>Confidential, customer-specific, commercially sensitive information on corporate room rates. (A)</p> Signup and view all the answers

The penalties imposed by the CCCS for Section 34 infringements are solely punitive and do not incorporate any element of disgorgement of ill-gotten gains derived from anti-competitive conduct.

<p>False (B)</p> Signup and view all the answers

Explain how 'information exchanges on individual future prices, output or production' are considered a hardcore conduct under Singapore's Section 34 and why they are treated with such severity.

<p>Exchanges of future pricing, output, or production plans are hardcore conduct because they directly undermine the fundamental competitive process of independent decision-making. By sharing such forward-looking strategic information, undertakings eliminate market uncertainty, facilitate collusion, and effectively pre-determine market outcomes, negating competition.</p> Signup and view all the answers

The CCCS 500/7002/14 case penalized fresh chicken distributors for engaging in both price-fixing and _________-compete agreements.

<p>non</p> Signup and view all the answers

In the context of Section 34 of the Competition Act 2004 (Singapore), which of the following scenarios most definitively constitutes an agreement with the 'object' of preventing, restricting, or distorting competition?

<p>Competing firms explicitly collude to establish fixed minimum resale prices for their products, documented in internal communications and implemented uniformly across the distribution network. (D)</p> Signup and view all the answers

Under Singapore's Section 34 Prohibition, an agreement between undertakings can only be deemed anti-competitive if it demonstrably 'prevents, restricts or distorts competition' in terms of its actual effects on the market, irrespective of the parties' intentions.

<p>False (B)</p> Signup and view all the answers

Critically evaluate the proposition that information exchange between competitors is inherently anti-competitive. Under what specific conditions, if any, might such exchange be permissible without contravening Section 34 of Singapore's Competition Act?

<p>Information exchange is not inherently anti-competitive. Permissible exchanges typically involve publicly available, non-commercially sensitive, non-strategic, sufficiently historic, and sufficiently aggregated data. Exchanges become problematic when they reduce strategic uncertainty in the market, facilitating collusion or coordinated behaviour.</p> Signup and view all the answers

Agreements considered 'hardcore restrictions' under Singapore competition law, often categorized as ‘by ______’ restrictions, are presumed to have an appreciable adverse effect on competition without needing extensive market analysis.

<p>object</p> Signup and view all the answers

Match the following categories of anti-competitive agreements with their corresponding descriptions under Singapore's Competition Act:

<p>Price-fixing = Agreements to directly or indirectly set, maintain, or manipulate prices, including discussions on price components, minimum or maximum prices, or pricing policies. Market-sharing = Agreements to divide markets by allocating geographical areas, customer segments, or other classifications to reduce competitive overlap. Bid-rigging = Collusive tendering practices, including cover pricing, bid suppression, bid rotation, and market division schemes in procurement processes. Output limitation = Agreements to restrict or control production, output, technical development, or investment to manipulate supply and prices.</p> Signup and view all the answers

Consider a scenario where two companies in a vertical supply chain, a manufacturer and a distributor, enter into an agreement. Which of the following best elucidates the applicability of Section 34 prohibition to this vertical agreement?

<p>While vertical agreements are generally less likely to be problematic, Section 34 can apply if the agreement, despite the vertical relationship, has the object or effect of restricting competition, particularly if it facilitates horizontal collusion or foreclosure. (B)</p> Signup and view all the answers

The 'Net Economic Benefit Exclusion' under Paragraph 9 of the Third Schedule of the Competition Act provides a blanket exemption for any agreement that demonstrably leads to an increase in overall economic efficiency, irrespective of any concurrent anti-competitive effects.

<p>False (B)</p> Signup and view all the answers

Explain the 'hub-and-spoke' theory of collusion in the context of anti-competitive agreements. How does this concept relate to the enforcement of Section 34, particularly concerning vertical relationships?

<p>Hub-and-spoke collusion involves a central entity (the 'hub') facilitating collusion between ostensibly independent firms (the 'spokes'). In vertical relationships, a supplier or platform could act as the hub, enabling horizontal collusion amongst its distributors or participants through information exchange or coordinated policies, thereby violating Section 34.</p> Signup and view all the answers

In the CCS 500/001/11 case concerning price-fixing of monthly salaries for Indonesian Foreign Domestic Workers, the concept of 'passive participation' leading to 'tacit approval' underscores that mere presence in anti-competitive meetings, without explicit __________, can be construed as a violation of Section 34.

<p>opposition</p> Signup and view all the answers

In the CCS 700/002/14 case involving hotels exchanging commercially sensitive information, what was the primary nature of the information exchanged that led to the infringement decision under Section 34?

<p>Confidential, customer-specific details regarding corporate room rates, including discount percentages and negotiation strategies. (A)</p> Signup and view all the answers

According to the principles illustrated in the 'Express Bus Agencies Association (“EBAA”) case', agreements solely addressing fuel and insurance surcharges are generally considered outside the ambit of Section 34 prohibition, as these are pass-through costs and not core pricing elements.

<p>False (B)</p> Signup and view all the answers

Illustrate, using a fictitious but realistic scenario in the Singaporean market, how 'information sharing (non-price or historical information)' might still constitute a 'by effect' restriction under Section 34. What specific market conditions or information characteristics would make such exchange problematic?

<p>Imagine three major logistics firms in Singapore regularly exchanging detailed, anonymized data on their operational capacities and real-time utilization rates. In a market with high barriers to entry and inelastic demand, this 'non-price' information sharing could reduce uncertainty about rivals' ability to absorb surges in demand, enabling tacit coordination to avoid price competition, especially during peak seasons. The market concentration and strategic nature of capacity data make this exchange problematic.</p> Signup and view all the answers

In contrast to 'hardcore' restrictions, 'by effect' restrictions necessitate a more granular analysis of the _________ context and the actual or likely impact on competition to determine a violation of Section 34.

<p>market</p> Signup and view all the answers

Which of the following agreements is LEAST likely to be scrutinized under Section 34 of Singapore's Competition Act?

<p>A voluntary code of conduct, established by an industry association of food manufacturers, recommending uniform 'best before' date labeling standards for packaged foods. (C)</p> Signup and view all the answers

Under Singapore's Competition Act, for an agreement to infringe Section 34, it is mandatory to prove that all parties involved had a subjective 'anti-competitive intent'. If subjective intent cannot be established, the agreement cannot be deemed unlawful.

<p>False (B)</p> Signup and view all the answers

In the context of Singapore's Competition Act, Section 34, which of the following best delineates the critical distinction between 'object' and 'effect' in the determination of anti-competitive agreements or concerted practices?

<p>'Object' denotes the <em>a priori</em> anti-competitive aim of the agreement, discernible from its terms and context, irrespective of actual market impact, while 'effect' concerns the demonstrable anti-competitive impact on the market, regardless of the original intent. (A)</p> Signup and view all the answers

Under Singaporean competition law, a 'gentleman's agreement', lacking legal enforceability and existing solely as an informal understanding between undertakings, unequivocally falls outside the purview of Section 34 of the Competition Act.

<p>False (B)</p> Signup and view all the answers

Articulate three distinct categories of 'hardcore' restrictions, as defined under Singaporean competition law, providing a concise example for each that illustrates its anti-competitive nature.

<ol> <li>Price-fixing: Agreements to directly or indirectly fix purchase or selling prices, such as agreeing on minimum resale prices, which eliminates price competition.</li> <li>Output limitation: Agreements to limit or control production or sales volumes, like setting quotas, artificially restricting supply and potentially raising prices.</li> <li>Market sharing: Agreements to divide markets, whether geographically or by customer type, such as allocating specific territories to competitors, reducing consumer choice and competition within those segments.</li> </ol> Signup and view all the answers

The exclusion of vertical agreements from Section 34 prohibition in Singaporean Competition Act is predicated on the condition that the agreement's nature does not result in a concerted practice that effectively functions as a _________ agreement, thereby circumventing the intended scope of the exclusion.

<p>horizontal</p> Signup and view all the answers

Match the arguments and counterarguments concerning the threshold for establishing 'casual infringing information sharing' under Singaporean competition law with their respective rationales:

<p>Lower Threshold Argument = Rationale: Even informal exchanges of sensitive information can precipitate anti-competitive market behavior due to subtle influences on strategic decision-making. Intent and Context Argument (Lower Threshold) = Rationale: The underlying intent to influence market behavior, even in seemingly innocuous information exchanges, necessitates rigorous scrutiny. Precedents and Legal Interpretations (Lower Threshold) = Rationale: Jurisprudence acknowledges that casual information sharing can be deemed infringing if it demonstrably leads to anti-competitive market outcomes. Higher Threshold Argument = Rationale: Not all casual information exchanges automatically translate into anti-competitive practices; a higher threshold prevents unwarranted regulatory overreach. Burden of Proof Argument (Higher Threshold) = Rationale: A lower threshold imposes an onerous burden on businesses to disprove anti-competitive intent in routine communications, potentially stifling legitimate business interactions. Distinguishing Casual and Organized Exchanges (Higher Threshold) = Rationale: Organized exchanges, with structured intent, are inherently more likely to influence market behavior than ad hoc, casual exchanges.</p> Signup and view all the answers

In the 'hotel cartel' case in Singapore, the CCCS differentiated between corporate and non-corporate customers for hotel room accommodation primarily because:

<p>The negotiation process, contract duration, and rate-setting mechanisms demonstrably differed between these customer categories, impacting competition dynamics uniquely. (D)</p> Signup and view all the answers

When the CCCS exercises its discretion to impose a financial penalty under Section 69(2)(d) of the Singaporean Competition Act, market definition is solely relevant for the initial determination of whether a Section 34 infringement has occurred, and plays no role in assessing the quantum of the penalty.

<p>False (B)</p> Signup and view all the answers

Identify and elaborate on the three key categories of anti-competitive practices employed by the capacitor manufacturers in the AECs cartel case, as detailed in the provided text.

<ol> <li>Agreements and information exchanges on price increases for AECs: Colluding on price hikes and sharing information to ensure coordinated implementation of these increases across different AEC types.</li> <li>Agreements to resist price reduction requests from customers: Cooperatively rejecting customer demands for lower prices and communicating these rejections to maintain inflated pricing levels.</li> <li>Exchange of information on customers' Request for Quotations (RFQs): Sharing sensitive pricing strategies for specific customers, including intentions to raise or maintain prices, to limit price competition and facilitate price-fixing.</li> </ol> Signup and view all the answers

In the context of an undertaking attending a meeting with an anti-competitive purpose, the threshold set by the CCCS for demonstrating non-liability under Section 34 requires the undertaking to prove it participated in the meeting without any anti-competitive _________, evidenced by explicitly communicating a divergent stance to competitors.

<p>intention</p> Signup and view all the answers

Match the following Singaporean competition law cases with the primary anti-competitive conduct they exemplify:

<p>Foreign Domestic Workers Case = Price-fixing of monthly salaries by employment agencies. Coach Operators Case = Distortion of ticket prices through minimum selling prices and mandated fuel/insurance charges. Hotel Cartel Case = Exchange of confidential, customer-specific, commercially sensitive information among competing hotels. AECs Cartel Case = Agreements on price increases, resistance to price reductions, and exchange of RFQ information among capacitor manufacturers.</p> Signup and view all the answers

For the 'net economic benefit exclusion' under Section 34 of the Singaporean Competition Act to be successfully invoked, an agreement must demonstrably:

<p>Contribute to either improving production or distribution or promoting technical or economic progress, while demonstrably not imposing indispensable restrictions on competition. (A)</p> Signup and view all the answers

Under Singaporean competition law, publicly available information, even when discussed among competitors in a strategic context, can never be considered anti-competitive due to its inherent public nature.

<p>False (B)</p> Signup and view all the answers

Explain why 'gentleman's agreements', despite lacking legal enforceability, are nonetheless scrutinized under competition law frameworks like Section 34 of the Singaporean Competition Act.

<p>Competition law focuses on the economic reality of agreements and concerted practices, not just their legal form. 'Gentleman's agreements', though informal, can still manifest a 'meeting of minds' and lead to coordinated anti-competitive behavior in the market. The lack of legal enforceability does not negate their potential to distort competition if they reflect a shared understanding and commitment to a particular course of action.</p> Signup and view all the answers

Price-fixing agreements are deemed the __________ form of restriction of competition due to their direct and immediate impact on market prices and consumer welfare.

<p>most restrictive</p> Signup and view all the answers

Match the type of 'hardcore restriction' with its corresponding description:

<p>Price-fixing = Agreements to manipulate purchase or selling prices directly or indirectly. Output limitation = Agreements to control or restrict production volumes or sales quotas. Market sharing = Agreements to divide geographical areas, customer segments, or product markets among competitors. Bid rigging = Collusive tendering practices, such as agreeing to allocate bids or withdraw bids to predetermine the tender outcome.</p> Signup and view all the answers

The common misunderstanding regarding the vertical agreements exclusion under Section 34 is that it applies:

<p>Broadly to any agreement not explicitly between direct competitors, regardless of whether it facilitates horizontal collusion. (C)</p> Signup and view all the answers

Vertical agreements, by definition, are invariably excluded from the prohibitions outlined in Section 34 of the Singaporean Competition Act, providing a safe harbor for collaborations along the supply chain.

<p>False (B)</p> Signup and view all the answers

Articulate the primary rationale behind the argument for a 'higher threshold' for establishing infringement in cases of 'casual information sharing' under competition law.

<p>The core rationale is to avoid over-regulation and prevent stifling legitimate business communications. Proponents of a higher threshold argue that not all casual information exchanges inherently lead to anti-competitive practices. Imposing a lower threshold could unduly burden businesses by requiring them to constantly prove the benign intent of routine communications, potentially chilling beneficial information flow and collaboration.</p> Signup and view all the answers

In the Singaporean hotel cartel case, the commercially sensitive information exchanged among competing hotels primarily related to _________ for corporate hotel room accommodation, revealing strategic pricing and market share intentions.

<p>customer-specific rates</p> Signup and view all the answers

For an undertaking attending a meeting with an anti-competitive object, publicly distancing itself from the discussion is:

<p>A legally mandated requirement to demonstrate a lack of anti-competitive intention and avoid potential liability under Section 34. (B)</p> Signup and view all the answers

Flashcards

Section 34 Prohibition

Section 34 of the Competition Act 2004 prohibits agreements between undertakings, decisions by associations of undertakings, or concerted practices that prevent, restrict, or distort competition within Singapore.

Hardcore conduct

Includes price-fixing, market-sharing, bid-rigging, output limitation and information exchange on future prices, output or production.

Information Sharing

Involves sharing particularly sensitive information that includes price, cost, capacity, proprietary data/information, and commercial plans.

Other risk areas

Information sharing (non-price or historical information), standardisation agreements (e.g., adoption of standard terms that limits competition) and conduct in the context of industry associations.

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Agreements effect on competition

Agreements that have an appreciable adverse effect on competition are presumed, regardless of the subjective intent of the parties involved.

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Price Fixing

Includes discussion on components of price, e.g. pricing policy, promotions and discussion on maximum or minimum prices.

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Nature of the agreement

The key consideration is the nature of the agreement, rather than the nature of the relationship between the parties.

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Net Economic Benefit Exclusion

The Net Economic Benefit Exclusion states the Section 34 Prohibition does not apply to agreements with net economic benefit.

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Public Distancing

The mere participation by an undertaking in a meeting with an anti-competitive purpose, without expressing manifest opposition to or publicly distancing itself from, the same is tantamount to a tacit approval of that unlawful initiative.

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Hotel Collusion: Exchange of Info

Such agreements include the discussion and exchange of "confidential, customer-specific, commercially sensitive information".

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Exchangeable Information

Types of exchangeable information (not exhaustive) includes anything that's publicly available, non-commercially sensitive, non-strategic, sufficiently historic and sufficiently aggregated

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Market Sharing

Involves allocating geographical areas or categories of consumers/services.

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Bid Rigging

Includes cover pricing, bid-suppression, bid-rotation, and market division.

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Output Limitation

Includes fixing production levels or use of quotas.

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Section 34 of the Competition Act prohibits:

Agreements or concerted practices that have as their object or effect the prevention, restriction, or distortion of competition within Singapore.

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Key elements of a Section 34 prohibition:

Agreements or concerted practices, object or effect, and the distortion of competition.

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Definition of an 'agreement' in competition law:

An agreement under competition law covers both legally enforceable and unenforceable agreements. It even covers so-called gentleman's agreements

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What is required for an agreement on actions:

A meeting of minds on the actions each party will or will not take in the market.

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Requirements for demonstrating no liability under Section 34:

Requires the undertaking to participate in the meeting without any anti-competitive intention.

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Requirements for Net Economic Benefit Exclusion:

A net economic benefit if it contributes to improving production or distribution or promoting technical or economic progress and does not impose restrictions which are not indispensable.

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Study Notes

  • Market behaviour prohibitions are known as antitrust among competition practitioners
  • Section 34 is the first prohibition under the Competition Act.
  • The origins of modern competition law can be traced to the United States in the 1890s
    • It sought to outlaw the restriction of competition by large companies cooperating to fix outputs, prices, and market shares through trusts
    • Hence the term antitrust
  • These days most evidence of cartels can be found in emails and private messaging functions on apps like WhatsApp
    • At every dawn raid conducted by the CCCS cubicles are sealed off in yellow barricade tape and laptops and mobile phones of suspected individuals are contained within evidence bags.
  • Section 34 prohibition is referred to as anti-competitive agreements.

Section 34 of the Competition Act

  • Prohibits agreements or concerted practices between decisions by associations of undertakings which have as their object or effect the prevention, restriction or distortion of competition within Singapore.

  • Key elements include agreements or concerted practices, object or effect, and the distortion of competition

  • Elements of an agreement under competition law are different from contract law

    • Contract law: there must be offer and acceptance, consideration, and an intention to create legal relations.
  • An agreement under competition law, need not be written or even formal or legally enforceable.

    • Cartel agreements are often deliberately left vague
    • Covers gentleman's agreements.
  • Market-sharing is where competitors agree to divide a product market or a geographical market between themselves.

  • Even informal discussions can lead to anti-competitive practices if sensitive information that influences market behavior is shared

  • Publicly available information is of course not anti -competitive when discussed generally, nor are certain categories of non -commercially sensitive information

    • If knowledge of past prices of a product cannot influence pricing decisions, it is unlikely that the sharing of such information will be infringing
  • Vertical agreements are agreements between undertakings which operate at different levels of the production distribution chain The key is whether the nature of the agreement resulted in a concerted practice rather than the nature of the relationship between the parties in the Agreement

  • If the nature of the relationship does not establish any of the following under Section 34(2):

    • 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
  • Some argue that the threshold for establishing infringing information sharing should be lower for casual exchanges.

    • Intent and Context: Proponents of a lower threshold emphasize the importance of intent and context.
  • Hotel Groups Case: CCCS found that sales representatives of Capri and Village Hotels, as well as Capri and Crowne Plaza, were engaged in agreements and/or concerted practices to discuss and exchange such information in connection with the provision of hotel room accommodation in Singapore to corporate customers. This was deemed anti-competitive.

Case on Capacitor Manufacturers:

  • The agreements included price fixing, and the exchange of confidential sales, distribution and pricing information for Aluminium Electrolytic Capacitors (AECs), in relation to customers in Singapore.

Aluminum Electrolytic Capacitors (AECs) Case

  • Agreements and information exchanges on price increases Between 2006 and 2008, the parties agreed on price increases and exchanged information on the implementation of these increases during regular meetings

  • Agreements to resist price reduction requests from customers The parties cooperated to collectively resist customer requests for price reductions. They regularly announced their efforts to reject such requests during meetings

  • Information exchanges on customers' Request for Quotations (RFQs): The parties discussed and exchanged information on pricing strategies for specific customers, including their intentions to increase prices or resist price reductions

  • Auto Parts Cartel Investigation: The CCS set a threshold for an undertaking attending a meeting with an anti-competitive purpose to demonstrate that it is not liable under the Section 34 prohibition

  • Requires demonstrating participation without anti-competitive intent and dissent from unlawful steps

Foreign Domestic Workers Case:

  • 16 employment agencies in Singapore infringed Section 34 by engaging in price-fixing activities
  • Public distancing is required when attending meetings with anti-competitive purposes, even without contribution or adherence to agreements.

The Express Bus Agencies Association Case

  • The coach operators agreed to fix the prices by procuring the setting of minimum selling prices and imposing fuel and insurance charges on passengers.

  • Overall, the ticket price of a one -way express coach ticket to Kuala Lumpur in Malaysia increased by approximately 61 % from 2003 to 2008.

  • An argument within Section 34 of the Competition Act may, on balance, have a net economic benefit if it contributes to improving production or distribution or promoting technical or economic progress and it does not impose on the undertakings concerned restrictions which are not indispensable to the attainment of those objectives, or afford the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the goods and services in question.

    • In seeking to establish the competition effects of conduct, market definition is important

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