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Competition Commission Consults on the Transitional Arrangements and the Appropriate Amount of Penalty
Posted on Wednesday, August 17, 2005 - 12:00 AM

The Competition Commission of Singapore (CCS) has on 17 Aug 2005 released the third set of 2 draft guidelines for public consultation. The drafts concern the Transitional Arrangements and the Appropriate Amount of Penalty for infringement of the Competition Act.

The draft Guideline on Transitional Arrangements outlines the transitional arrangements that will be provided for in the Transitional Period Regulations. The CCS will allow parties to agreements made on or before 31 July 2005 additional time, up to 30 June 2006, to review these agreements and bring them into compliance with the Act. This will apply not only to agreements in existence for more than 5 years prior to the Act’s commencement, but all agreements made on or before 31 July 2005. Parties to agreements made on or before 31 July 2005 will also be given the option to apply to the CCS, before 1 July 2006, for a longer transitional period to effect compliance. Where the application so merits, the CCS will generally grant a transitional period of up to one year. The CCS will not impose a financial penalty during the aforementioned time periods.

The draft Guideline on the Appropriate Amount of Penalty sets out the basis on which the CCS will calculate financial penalties for infringements of the sections 34 and/or 47 prohibitions. This includes the factors that the CCS will take into consideration when imposing any financial penalty. It also sets out the policy objectives of the CCS in imposing any financial penalty.

MEDIA RELEASE

17 August 2005

Competition Commission Consults on the Transitional Arrangements and the Appropriate Amount of Penalty

CCS allows business community more time to comply with new Act

1. Members of the business community who are reviewing their agreements to bring them into compliance with the Competition Act 2004¹ (Act) by the end of the year, will have more time to renegotiate and amend their agreements under the transitional arrangements that the Competition Commission of Singapore (CCS) will implement. The details of the transitional arrangements are included in a set of two draft guidelines that CCS issued today for public consultation.

2. The section 34 prohibition relating to anti-competitive agreements and the section 47 prohibition relating to abuse by a business of its dominant position will come into force on 1 January 2006.

3. The guideline on transitional arrangements² outlines how parties to agreements made on or before 31 July 2005 will have additional time to review these agreements and bring them into compliance with the Act.

4. The guideline on the appropriate amount of penalty³ sets out the basis on which the CCS will calculate financial penalties for infringements of the sections 34 and/or 47 prohibitions.

Public Feedback

5. This is the third set of guidelines issued by the CCS for public consultation. The first set of three draft guidelines on the section 34 prohibition, the section 47 prohibition, and market definition were finalised and issued on 29 July 2005. The second set of four draft guidelines⁴ on how the CCS will investigate and enforce infringements of the sections 34 and/or 47 prohibitions, CCS? leniency programme for ?whistleblower? cartel members and the procedure for notifying agreements or conduct for guidance or decision were issued on 26 May 2005 for public consultation. The remaining guidelines will be issued for public consultation in the next few months. The CCS aims to complete the process by November 2005.

6. 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 Government Online Consultation Portal at www.feedback.gov.sg . The closing date for submissions is on or before noon on 16 September 20055.

7. The CCS, together with the Singapore Business Federation (SBF) will conduct outreach seminars on 30 August and 1 September 2005 for business associations, chambers, companies and businesses. Interested parties can contact SBF at events@sbf.org.sg or call 6827 6877 to register.

8. Please refer to Annex A for background information.

- End -

Annex A

Notes to Editor:

1. The Competition Act 2004 (Act) was passed in Parliament on 19 October 2004 and assented to by the President on 4 November 2004. The new law will improve Singapore?s international competitiveness by enhancing the efficient functioning of markets in Singapore. The focus is on activities, that have an appreciable adverse effect on competition in Singapore and which do not have any net economic benefit. The Act is being implemented in phases:

Phase I - On 1 January 2005, the provisions establishing the Competition Commission of Singapore (CCS) were brought into force.

Phase II - On 1 January 2006, the provisions on anti-competitive agreements, decisions and practices; abuse of dominance; investigation, enforcement; appeal process; and miscellaneous areas will come into force.

Phase III - The remaining provisions relating to mergers and acquisitions will likely come into force at least 12 months after Phase II.

2. The draft Guideline on Transitional Arrangements outlines the transitional arrangements that will be provided for in the Transitional Period Regulations. The CCS will allow parties to agreements made on or before 31 July 2005 additional time, up to 30 June 2006, to review these agreements and bring them into compliance with the Act. This will apply not only to agreements in existence for more than 5 years prior to the Act?s commencement, but all agreements made on or before 31 July 2005. Parties to agreements made on or before 31 July 2005 will also be given the option to apply to the CCS, before 1 July 2006, for a longer transitional period to effect compliance. Where the application so merits, the CCS will generally grant a transitional period of up to one year. The CCS will not impose a financial penalty during the aforementioned time periods.

3. The draft Guideline on the Appropriate Amount of Penalty sets out the basis on which the CCS will calculate financial penalties for infringements of the sections 34 and/or 47 prohibitions. This includes the factors that the CCS will take into consideration when imposing any financial penalty. It also sets out the policy objectives of the CCS in imposing any financial penalty.

4. The CCS is presently evaluating the submissions made by the public in response to its public consultation on the Guideline on The Powers of Investigation, Guideline on Enforcement, Guideline on Lenient Treatment for Undertakings Coming Forward with Information on Cartel Cases and Guideline on Filing Notifications for Guidance or Decision, which closed on 30 June 2005.

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