CPL 2 - Anti-competitive Agreement

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Questions and Answers

What was a significant aim of the modern competition law established in the 1890s?

To outlaw the restriction of competition by large companies. (correct)

To eliminate small businesses through aggressive competition.

To regulate prices independently without federal oversight.

To promote government cooperation with large corporations.

Which modern communication methods are commonly associated with cartel evidence collection?

Traditional phone calls and mail correspondence.

Face-to-face meetings and fax machines.

Emails and messaging apps. (correct)

Public forums and conferences.

What is a key difference between agreements under competition law and contract law?

Agreements under competition law need not be formal or written. (correct)

Contract law agreements are more flexible in nature.

Competition law agreements always involve consideration.

Competition law requires formal written agreements.

What is one of the main elements identified under the Section 34 prohibition?

Agreements or concerted practices. Signup and view all the answers

How can cartel agreements be characterized according to competition law?

They are frequently vague and informal. Signup and view all the answers

What does Section 34 of the Competition Act address specifically?

Behavioral prohibitions against anti-competitive agreements. Signup and view all the answers

What term is commonly used to describe the secret gatherings of executives involved in cartels?

Smoke-filled rooms. Signup and view all the answers

Which behavior is classified as hardcore conduct that restricts competition?

Agreements to fix purchase or selling prices Signup and view all the answers

What is the primary characteristic of collusive behavior in a market?

Meeting of minds on market actions without express agreement Signup and view all the answers

What must be proven for an agreement to infringe the Section 34 prohibition?

An objective of restricting competition Signup and view all the answers

Which of the following best represents an aspect of buy-effect restrictions?

Agreements between buyers to set prices paid to suppliers Signup and view all the answers

Which type of agreement involves firms collaborating on bids for contracts?

Bid rigging Signup and view all the answers

What is the primary intent behind hardcore restrictions like price-fixing?

To limit competition and manipulate market prices Signup and view all the answers

In terms of market behavior, what does output limitation refer to?

Controlling production levels or quotas Signup and view all the answers

What could be considered an example of a market-sharing agreement?

Dividing product markets among competitors Signup and view all the answers

Which type of agreement may prevent the development of alternative products?

Standardization agreements Signup and view all the answers

What type of information, when shared, is unlikely to infringe Section 34?

General pricing trends from three years ago Signup and view all the answers

Which category of agreements falls under the exclusion of Section 34 prohibition?

Agreements between businesses operating at different levels of distribution Signup and view all the answers

Which of the following scenarios is an example of a vertical agreement?

A manufacturer agreeing with a distributor of product Y Signup and view all the answers

What is a common misconception about the exclusion of vertical agreements under Section 34?

All agreements not involving competitors are excluded Signup and view all the answers

What is the likelihood of an organized exchange of sensitive data infringing the prohibition?

Very likely to infringe Signup and view all the answers

Which information type is clearly not considered anti-competitive?

Publicly available information Signup and view all the answers

An agreement between which parties could be a violation of the Section 34 prohibition?

A car showroom and an insurance firm Signup and view all the answers

Why is knowledge of past pricing unlikely to influence current pricing decisions?

It does not reflect current market conditions Signup and view all the answers

What did the CCCS find regarding the hotel groups in Singapore?

They infringed Section 34 of the Competition Act by the sharing of commercially sensitive information. Signup and view all the answers

Which two customer categories did the CCCS identify in its analysis?

Corporate and non-corporate customers. Signup and view all the answers

What can be inferred about CCCS penalties in relation to Section 34?

They can be very significant, exceeding $30 million Signup and view all the answers

What distinguishes vertical agreements from horizontal agreements?

Vertical agreements operate at different production levels Signup and view all the answers

What is considered a focal product for this case regarding hotels?

Corporate customers' hotel room accommodation. Signup and view all the answers

What was the role of Andrew Yip in the discussed matter?

He attended as counsel to one of the parties involved. Signup and view all the answers

What must an undertaking do to avoid liability during meetings with potential anti-competitive purposes?

Publicly distance itself from the discussed unlawful steps Signup and view all the answers

How does the CCCS treat foreign headquarters in global cartel investigations?

They may impose penalties on both local subsidiaries and foreign headquarters. Signup and view all the answers

What was the primary economic harm identified in the case involving ticket price fixing by coach operators?

Distortion of ticket prices through collusion Signup and view all the answers

Which factor distinguishes corporate from non-corporate customers in hotel accommodation?

The negotiation process and duration of contracts. Signup and view all the answers

In the context of the hotel industry, what does Section 34 of the Competition Act pertain to?

The prohibition of cartel behavior and information exchange. Signup and view all the answers

During which time period did the ticket prices for one-way express coach tickets to Kuala Lumpur increase significantly?

2003 to 2008 Signup and view all the answers

What aspect about hotel customer groups did the CCCS conclude?

Hotels can categorize customer groups differently. Signup and view all the answers

What percentage did coach operators mark up fuel and insurance charges by, according to the CCCS findings?

300% Signup and view all the answers

What is a potential consequence of an undertaking not publicly distancing itself from unlawful actions discussed in a meeting?

It could face legal penalties or liability Signup and view all the answers

Which statement best summarizes the findings of the CCCS regarding the exchange of information?

It constitutes a potential violation of the Competition Act. Signup and view all the answers

What does the term 'global cartel matter' imply in the context of the CCCS's work?

Collusion between entities operating internationally affecting local markets. Signup and view all the answers

Study Notes

Market Behavior Prohibitions

Market behavior prohibitions, also known as antitrust, are the second of four lectures in the Competition Law Module.
Their origins trace back to the 1890s in the U.S., aimed at preventing large companies from restricting competition through trusts.
Cartels, once structured as smoke-filled rooms, now frequently occur as email and private messaging exchanges (e.g., WhatsApp).
Enforcement agencies (CCCS) often find evidence of antitrust violations during dawn raids, where they seize computers and phones from suspected individuals.

Section 34 Prohibition: Anti-competitive Agreements

Section 34 of the Competition Act prohibits any agreements or concerted practices between businesses aiming to prevent, restrict, or lessen competition in Singapore.
These agreements, whether formal or informal (gentleman's agreements), can be infringing.
Hardcore conduct includes price fixing, market allocation (sharing markets), and bid rigging.
Agreements can be infringing even if there's no intent, but rather just a restrictive effect on competition.
Sharing of information can be prohibited depending on the type and context. Non-commercially sensitive information, for instance, is usually not considered anti-competitive.

Other key elements

Agreements/concerted practices
Object/effect: prevention, restriction, or distortion of competition
Vertical agreements are excluded (only those between competitors in the same production level).
Meetings with anti-competitive objectives require a public distancing statement.
Evidence of a global cartel is possible from a series of meetings across countries.
Financial penalties are possible for anti-competitive activity.

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Description

Explore the key concepts of market behavior prohibitions in this quiz based on the Competition Law module. Learn about the origins of antitrust laws in the U.S., the role of enforcement agencies, and the implications of Section 34 in Singapore's Competition Act. Test your knowledge on how anti-competitive agreements can impact market dynamics.