Competition Commission Consults on Draft Guidelines of the Competition Act 2004 (Act)

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1. As part of the preparation for Phase II implementation of the Competition Act2004 ('Act'), the Competition Commission of Singapore (CCS) today issued draft guidelines for public consultation. Guidelines indicate how the CCS will interpret and give effect tot the provisions of the Act, which will come into force on 1 January 2006.

2. Guidelines are intended to help businesses understand how the CCS will administer and enforce infringements of the prohibitions in the Act. This will improve transparency and provide greater clarity to businesses on the competition law regime. There will be public consultations to seek inputs and feedback before the guidelines are finalised.

3. The CCS invites views and comments on the first set of three draft guidelines pertaining to the section 34 prohibition and market definition. The remaining guidelines will be issued progressively for public consultation in the ensuring months. The CCS aims to complete the process by November 2005.

4. Section 34 prohibits agreements decisions and concerted practices, that prevent, restrict or distort competition in Singapore. These include agreements between competing firms to fix prices, fix tender bids, reduce the quantity of goods and services sold, or to share markets. The provisions of any agreement that infringe this prohibition will be rendered void on or after 1 January 2006 to the extent of the infringement. The CCS will focus principally on anti-competitive agreements that have an appreciable adverse effect on markets in Singapore. The section 34 prohibition guideline sets out some of the factors and circumstances which the CCS will consider in determining whether agreements are anti-competitive.

5. Section 47 prohibits firms from abusing their dominance in ways that are anti-competitive and which work against longer term economic efficiencies. However it does not prohibit dominance or substantial market power pre se - firms can, and should, seek to increase or maintain their markets positions through offering better quality, more competitive pricing or wider range of goods at higher quality of service standards. The section 47 prohibition guideline sets out some of the factors and circumstances which the CCS will consider in determining whether an undertaking has engaged in conduct amounting to an abuse of a dominant position in a market.

6. The market definition guideline provides the analytical framework on how the CCS will define markets when investigating possible infringements of the section 34 and section 47 prohibitions under the Act.

(The draft guidelines and public submissions received are available here)

Guiding Principles and Framework of the Draft Guidelines

7. The key function and duty of the CCS is to promote healthy competitive markets in Singapore. In drafting the guidelines, CCS took into account our specific needs and circumstances, in particular, that Singapore is a small and open economy.

8. The CCS will prioritise its enforcement and target those that are clearly more harmful and warrant regulatory intervention. The application of the guidelines will depend on the facts of each case.

9. Commenting on the drafting process, Mr Ng Wai Choong, Chief Executive of the CCS said, "In crafting the guidelines, we avoided being prescriptive; instead, our guidelines outline the conceptual, analytical and procedural framework within which the CCS will investigate and assess complaints and undertake enforcement." He added, "Ultimately, we want to see competitive and robust markets which are not heavily burdened by complex compliance issues."

Public Feedback

10. The consultation documents on the draft guidelines can be downloaded from the CCS website at www.ccs.gov.sg under the section "Guidelines" and the Gorvernment Online Consultation Portal at www.feedback.gov.sg.

11. The closing date for submissions is on or before 12 noon, 13 May 2005. The public is invited to send their feedback in both hard and soft copy (in Microsoft Word format) to Competition Commission of Singapore, 5 Maxwell Road #13-01 Tower Block, MND Complex, Singapore 069110 and e-mail at CCS_Draftguidelines@ccs.gov.sg

12. . The CCS reserves the right to make public all or parts of any written submission. Submitting parties may however request confidentiallity for any part of the submission that is proprietary or commercially sensitive.

13. The CCS, together with the Singapore Business Federation (SBF) will conduct outreach seminars for business associations, chambers, companies and businesses. Interested parties can contact SBF at events@sbf.org.sg or call 6827 6877 to register.

14. Please refer to Annex 1 for more background information.