Second reading round up speech by SMS Koh for the Competition (Amendment) Bill 2018

SECOND READING ROUND UP SPEECH FOR THE COMPETITION (AMENDMENT) BILL 2018

1. Mr Speaker, Sir, I thank the MPs who have spoken and note that all of them support the Bill, and some have raised pertinent points that I will now address.CCS acceptance of legally binding commitments

2. Mr Azmoon Ahmad asked if the proposed amendment to allow CCS to accept legally binding commitments for cases involving the section 34 and section 47 prohibitions, make it easier for companies to circumvent competition law. I would like to give my assurance to Mr Azmoon Ahmad that CCS is committed in their efforts to ensure a robust competition regime to enable well-functioning markets that support a level playing field for businesses in Singapore. Commitments offered to CCS must remedy, mitigate or prevent the adverse effects of the anti- competitive conduct that are currently being investigated. And in assessing their acceptance of commitments, CCS must also be assured that the commitments are sufficient to prevent the recurrence of such anti-competitive conduct.

3. The proposed amendment allows CCS to take more timely action against a party, who had previously provided the commitment but breached a commitment, so they do not then need to re-open fresh investigations into the anti-competitive conduct itself. This strengthens, rather than limits, CCS’s enforcement efforts to eliminate and control anti-competitive practices in Singapore.CCS conduct of general interviews during inspections 

4.  Mr Patrick Tay has asked about how the need for the service of the section 63 notice on the person to be examined during CCS’s inspections and searches conducted pursuant to sections 64 and 65 of the Competition Act, has resulted   in an inefficient investigation process or caused disruption to the business being investigated. And in addition, Mr Tay has asked about the safeguards to ensure that the person examined is sufficiently informed of the subject matter and purposes of the investigation.

5. The notice or warrant issued pursuant to sections 64 or 65 of  the Competition Act respectively, allows CCS to obtain documents relating to the investigation, and require any person to provide an explanation of these documents, including where to locate the documents if they are not on the premises. Prior to entering the premises, CCS has to serve the section 64 notice or section 65 warrant on the occupier of the premises. This notice or warrant states the subject matter and the purpose of CCS’s investigation, which will be explained to the occupier as well. CCS will also make clear the occupier’s and the occupants’ obligations and rights, such as it being an offence if they provide false or misleading information to the investigating officer.

6. However, CCS may sometimes need to also ask general questions that are related to the subject matter and purpose of the investigation, but which do not relate to the explanation of the documents obtained. For example, without the proposed amendments, if the scope of CCS’s investigations is on bid-rigging and CCS uncovers an email correspondence chain relating to the rigging of a tender during an inspection, they would only be able to require any person to explain what the email correspondence is about, but would not be able to ask about what other related projects the parties in the email may also have been involved in so  it could well be many many bid rigging episodes but that email documented one episode and without this broader scope of questioning, they are limited in obtaining information about that one episode. For CCS to be able to more do  that, they would need to first serve a separate section 63 notice on the individual they wish to examine, and re-explain the necessary obligations and rights to the individual again – a redundant duplication of work, both for the  agency and for the individual.

7. This prolongs the duration of the inspection or search, and results in a longer than necessary disruption to the business being investigated. It also results in  two separate statements being recorded from the same person, one pursuant to the powers under section 63 and the other under section 64. The proposed amendment thus seeks to streamline CCS’s investigation process, to enable  CCS to serve a single notice to enter the premises to obtain documents, and also ask questions pertaining to the documents found on the premise, as well as require occupants to provide information relating to the subject matter and purpose of the investigation.

8. Mr Patrick Tay also asked whether a person being examined would be allowed access to legal representation, about the safeguards that the statements are properly recorded, and that CCS officers do not go beyond the allowed scope of questioning. Mr Louis Ng also raised a concern about the individual having sufficient time to seek legal advice on CCS’s requirements.

9. I would like to assure Mr Ng and Mr Tay that as part of CCS’s existing investigation procedure, CCS will verbally inform the occupier and occupants, of the purposes of their investigation as well as their obligations and rights, which includes the right to legal representation, prior to entering the premises. If an individual that CCS wishes to examine, expresses his will to be interviewed in  the presence of his legal advisor, CCS will provide a reasonable amount of time to allow the legal advisor to arrive at the premises. In addition, where a written notice is addressed to an individual, it is not acceptable for another person to respond on that individual’s behalf. But this does not prevent the individual from obtaining legal advice in relation to the notice.

10. As a further safeguard, the subject matter and purpose of the investigation is also stated in the notice or warrant issued pursuant to sections 64 and 65 of the Act, which CCS officers adhere strictly to. Hence they will only ask questions related to the subject matter. Furthermore, the statement given by the individual has to be read to the individual in a language he understands, before he signs the statement. The individual also has the opportunity to correct the statement, if necessary.

11. In addition, should CCS rely on the statement for their decision, CCS will first issue a Proposed Infringement Decision or PID. Parties will be able to inspect CCS’s evidence and make representations to CCS, including if they feel that  CCS has gone beyond the scope of investigations during the interview, in response to the PID. CCS will take into consideration, parties’ representations, before issuing their final decision in an Infringement Decision or ID. If parties disagree with CCS’s decision in the ID, they may appeal to the Competition Appeal Board, which is an independent body comprising members appointed by the Minister for Trade and Industry.Provision of confidential advice as a statutory process 

12.  Mr Azmoon Ahmad has asked whether CCS is still able to make a decision pursuant to section 57, which provides for the process that an anticipated merger has infringed the section 54 prohibition, after providing confidential advice to the contrary earlier. The introduction of new section 55A formalises CCS’s provision of confidential advice on anticipated merger, in the situation where information about the merger is not yet in the public domain. In the spirit of confidentiality, CCS will base its assessment of the anticipated merger on the information provided by the merging entities. CCS will not request for information from any third party, such as the applicant’s main customers or competitors, or conduct any public consultation to assist in their assessment. As such, the advice that CCS issues under the new section 55A is not binding on CCS.

13. In the situation where information about an anticipated merger is already in the public domain, merging entities may make an application for CCS’s formal assessment of whether the anticipated merger, if carried into effect, will infringe the section 54 prohibition. This is provided for under section 57 of the Competition Act. Notwithstanding that CCS issues a favourable decision that the anticipated merger will not infringe the section 54 prohibition, CCS may take further action if it has reasonable grounds to suspect that information on which CCS had previously based its decision was materially incomplete, false or misleading, or if a party who had provided a commitment has failed to adhere to it. This is provided for under the existing section 59 of the Act.

14. Mr Henry Kwek has asked whether the speculated merger between Uber and Grab will achieve a dominance that will crowd out other taxi companies, causing consumers to ultimately lose out. CCS has the power to review any merger which may result in a substantial lessening of competition in any market in Singapore, and is monitoring this matter.CCS’s work as the national competition authority 

15. Mr Henry Kwek also asked for an update on CCS’s focus over the past few years. CCS continues their efforts to ensure effective enforcement of the Competition Act and to raise awareness of competition law in Singapore. This includes their work in assessing merger notifications and conducting market inquiries, in order to ensure that markets work well for both businesses and consumers. Over the past 5 years from 2013 to 2018, CCS has investigated into nearly a hundred cases of potential infringements of the Competition Act.

16. I also note Mr Henry Kwek’s feedback on asking the government to consider setting up a committee to look into profiteering. I would like to assure Mr Kwek that the government will monitor the situation and take the necessary measures against businesses found to be profiteering.

17. In addition, Mr Azmoon Ahmad has suggested for the government to take into consideration, in our future reviews of the Competition Act, the need to protect our traditional businesses, as well as our small and medium sized enterprises or SMEs. The government notes the feedback and I also wish to clarify that the Competition Act is a broad based legislation targeted at promoting efficient market conduct to protect consumers and businesses from anti-competitive activities. In this regard, there may be more targeted ways to help our SMEs, such as through the support given by our economic agencies.Conclusion 

18.  Mr Speaker, Sir, the proposed amendments seek to address existing administrative gaps, in order to strengthen the current competition regime.

19. Competition law is an important tool to ensure well-functioning and healthy markets, to ensure a level playing field for all businesses to compete and innovate, such that they can become more efficient and productive, which is essential for Singapore’s next phase of innovation-driven economic growth.

Thank you.