Strong and vibrant economies have competitive markets at their core. In a competitive market, new ideas are constantly generated and new businesses set up, challenging the position of incumbents. As a result, businesses are spurred to be more efficient, innovative, productive and responsive, thereby becoming stronger over time.

Competition leads to a greater variety of goods and services and brings benefits to consumers. More importantly, it ensures that Singapore has a dynamic business community able to respond to the needs of a changing world. Activities that impede or restrict effective competition thus hurt consumers, businesses and Singapore’s long term interest.

Competition policy keeps the market competitive

It is the aim of competition policy and laws to ensure that markets are, and remain, competitive by protecting the competitive process. The competitive process empowers customers to exercise choice in switching to new products or new suppliers. It also allows new businesses to enter and existing competitors to develop new ways to compete in a market. It is through the choice of customers and corresponding responses of businesses that competition brings about innovation, efficiency, improved productivity and better quality of products and services.

The competitive process can be disruptive

However, it is not the aim of competition policy to protect new entrants, competitors or incumbents. Businesses which are inefficient or unable to respond to customer needs will either need to upgrade or phase out. Such entry and exit of businesses, though at times disruptive, is a necessary part of the competitive process.

The competitive process will bring about adjustment of prices as businesses enter or exit the market. Furthermore, while some businesses may charge lower prices, others may charge higher prices with better quality products or services.

CCS adopts a two-pronged approach: enforcement and advocacy

CCS is the competition authority in Singapore. Its mission is to champion competition for growth and choice. And it does this through a two-pronged approach:

First, CCS enforces the Competition Act and takes action against anti-competitive agreements, abuse of dominant position and mergers which substantially lessen competition.

Second, CCS advocates competition by working with other government agencies, the business community and consumer groups. CCS will work with other government agencies to promote pro-competition government policies. It will also raise greater awareness of the importance of competition amongst businesses and the general public.

Enforcement priority is on anti-competitive practices which have significant adverse impact on the economy

Given the wide-ranging industries and markets, CCS will not be able to look into every possible infringement of the Competition Act. It will prioritise its enforcement efforts based on:

(a)      potential impact on the economy and society (eg, how significant is the industry in the Singapore Economy, does it have a great impact on business costs in Singapore, how large a consumer base it has, how much will it add to costs of living?);

(b)      severity of the conduct (eg, is it hard-core price-fixing, serious abuse of dominance, mergers which substantially lessen competition);

(c)       importance of deterring similar conduct (eg, will other companies feel free to engage in the same conduct if it is left unchecked?);

(d)       resource considerations (how many cases is CCS handling, how resource intensive is the case relative to the expected benefits ?);

(e)       risk of over-intervention (eg, when action by CCS may inadvertently deter innovation and risk-taking by businesses).   

CCS will act in a graduated manner proportional to the culpability and degree of infringement in deciding whether to make a finding of infringement and intervene in a particular case. However, when CCS is convinced of the merits of a case, it will pursue it uncompromisingly.

CCS is impartial in our treatment towards all businesses. However, in assessing the potential impact on the economy and society, the size and reach of the businesses will be a consideration.

CCS intervenes to achieve a better outcome

Our enforcement philosophy is aimed at achieving a better competitive outcome for the industry and the consumers. While it is important to impose penalties as deterrence, it is  also important that our intervention can improve the situation. In this regard, our mode of intervention and remedies will take into consideration the imperfections in the market, such as asymmetric/imperfect information, insufficient public education, high barriers to entry or a limited number of companies. 

Where prevention of anti-competitive behaviour is possible, CCS endeavours to intervene before the event rather than allow the businesses to go ahead and then penalize them afterwards.

Where possible, CCS will address the root of the issue. For instance, CCS may pursue advocacy in addition to, or instead of, enforcement, to lower barriers to entry.

CCS takes a long-term view towards achieving competitive outcomes

The results from our intervention may not be immediately visible. However, in the longer term, the market will adjust to freer competition. For instance, a market that is used to price recommendations may find itself in unfamiliar grounds when price recommendations are removed. However, in the longer term, consumers will learn to search for the right supplier and businesses will adjust to competition based on quality and prices. While CCS will try to minimize any short term adverse impact, it may not be totally avoided. More importantly, CCS will not seek to avoid short term disturbance at the expense of long-term benefits.

Competition impact among other policy considerations

When government agencies formulate their policies, there are other policy considerations such as consumer protection, social policy objectives, and development of new industries. CCS aims to generate greater awareness among other government agencies so that unintended consequences on competition are minimised, and that competition plays a positive role in achieving these other policy objectives.

CCS will also work with government agencies to promote greater adherence to good competition practices when they formulate new rules, regulations and procedures. We will also work with the agencies to remove existing rules which may impede competition.