What specific activities and sectors are excluded under the Act?
The activities that have been excluded in the Third and Fourth Schedules of the Competition Act include:
- Services of general economic interest;
- Activities necessary to comply with legal requirements or to avoid conflict with Singapore's international obligations;
- Activities arising from exceptional or compelling reasons of public policy;
- Specified activities such as the supply of ordinary letter and postcard services by a person licensed and regulated under the Postal Services Act, the supply of piped potable water, the supply of wastewater management services, the supply of scheduled bus services by any person licensed and regulated under the Public Transport Council Act, the supply of rail services carried out by a person licensed and regulated under the Rapid Transit Systems Act, cargo terminal operations carried out by a person licensed and regulated under the Maritime and Port Authority of Singapore Act;
- Conduct relating to the clearing and exchanging of articles undertaking by the Automated Clearing House or activity of the Singapore Clearing Houses Association in relation to its activities regarding Automated Clearing House;
- Vertical agreements, i.e. arrangements between businesses at different levels of the production or distribution chain;
- Agreements or conduct directly related and necessary to the implementation of a merger;
- Agreements with net economic benefit (enjoys exclusion only from the section 34 prohibition). Such agreements are those that improve production or distribution, or promote technical or economic progress, and in which restrictions are absolutely necessary to achieving these benefits and do not substantially eliminate competition. Where relevant, a block exemption order may also be issued by the Minister for Trade and Industry at CCCS’s recommendation to exempt a particular category of agreements that yield net economic benefit; and
- Goods, services and mergers regulated under any other law or competition codes, and other specified activities. You can find the list of sectoral exclusions here. The sectors have been excluded based on public interest considerations such as national security, defence and other strategic interests or because existing sectoral competition frameworks are already in place. Cross-sectoral competition matters will be dealt with by CCCS, in consultation with the sectoral regulators.
What activities are exempted from the Act?
A block exemption automatically exempts a group of agreements from certain competition rules if it falls within its terms. Section 36 of the Act provides that CCCS may recommend that Minister issue a block exemption in respect of particular categories of agreements if CCCS is of the opinion that the agreements may, on balance, have net economic benefits as it fulfils certain criteria. These criteria are the same as those under the net economic benefit test set out in the Third Schedule. Such an exemption is known as a block exemption and it only applies in respect of the section 34 prohibition.
To date, the Minister has issued one block exemption in relation to liner shipping agreements (“BEO”) which came into operation on 1st January 2006 and was extended to continue until 31 December 2015.
Exemption of a merger on grounds of public interest consideration
Parties to a merger which has been held by CCCS to infringe the section 54 prohibition may seek to apply to the Minister for the merger to be exempted on the ground of public interest considerations. Under the Act, public interest considerations refers to “national or public security, defence and such other considerations as the Minister may, by order published in the gazette prescribe”. To date, there has been no other public interest considerations gazetted.