Speech by Minister Lim Hng Kiang at the 5th Competition Commission of Singapore-Singapore Academy of Law (CCS-SAL) Conference

​KEYNOTE ADDRESS BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY (TRADE) AT THE 5th COMPETITION COMMISSION OF SINGAPORE-SINGAPORE ACADEMY OF LAW (CCS-SAL) CONFERENCE SUPREME COURT AUDITORIUM, 16 AUGUST 2017, 09.10AM

Mr Aubeck Kam, Chairman CCS

Ms Serene Wee, Chief Executive of the Singapore Academy of Law,

Distinguished guests,

Ladies and gentlemen,

A very good morning.

Introduction

           It gives me great pleasure to be here with all of you today. To international friends, a warm welcome to Singapore. This is the fifth time the Competition Commission of Singapore, or CCS, has partnered the Singapore Academy of Law (SAL) in bringing together international and local competition experts, law practitioners, academics, professionals and students to share on the latest developments in competition policy and law, and to discuss fresh approaches to competition issues in the new economy.  

2           As Chairman CCS has highlighted, the theme of this year’s Conference is on the role of competition policy and law in making markets work well, including the challenges to traditional business models with the advent of disrupters, the digital economy, big data and designing remedies in markets where competition concerns are identified.

3           Singapore’s past and future economic prosperity has always been premised on keeping our markets free and open, and strengthening our economic linkages with overseas partners to seize opportunities in new markets. Competition policy and law is an important tool in keeping markets open and ensuring that businesses can compete on a level playing field. Competition spurs businesses to differentiate and innovate, to become more efficient and productive. This also brings about benefits for consumers as they gain quicker access to new and better products and services.

4           Vibrant and competitive markets are fueled by constant innovation, which enable businesses to achieve productivity-driven growth and is thus crucial for sustainable economic growth in the long term.

Competition and disruptive innovation

5           The rapid advancement of technology today blurs the lines between our physical spaces and digital experiences, with unprecedented speed, scale and scope. This has caused disruptions to many markets across various sectors, but the impact of such disruptions are not necessarily negative. For example, digital technologies have enabled the development of sharing platforms, which benefit both businesses and users. Smaller businesses are now able to enter the market and better compete. Consumers can also enjoy a wider range of products and services, as there is a speedier and better matching of needs and preferences between businesses and consumers.

6           For instance, online food delivery platforms, which enable food establishments to achieve a far greater customer catchment area. Consumers also enjoy a broader selection of food options, and the luxury of their food being delivered right to their doorsteps. This is an example of how disruption has resulted in innovative solutions, enabling customized user experiences and opening up new opportunities to improve the quality of life for many.

7           Despite the many benefits brought about by the growth of the digital economy, it has also brought about new regulatory challenges for competition authorities and regulators.

8               Competition authorities and sectorial regulators must move with the times to be perceptive, anticipative, and adaptive. Policies and practices must be “future-ready” to ensure that they do not become a stumbling block to innovative new entrants.

9               CCS has always been in close collaboration with other government agencies and regulators to provide competition impact advisories to ensure that while their regulations meet their policy objectives, it should not undermine competition or limit innovation within the relevant markets.

10             The lack of taxis, especially during peak hours or inclement weather, has been a persistent complaint among commuters in Singapore for many years. Third party ride booking services first appeared in Singapore in late 2013. The apps eased peak period demand by facilitating a more efficient matching of taxi supply and demand. In assisting the relevant authorities on the development of a regulatory framework for these third party ride booking apps, CCS conducted a survey of the possible barriers to entry into the market and the potential benefits of these apps. Their findings showed that the third party ride booking apps had the ability to deliver benefits to ride operators, drivers and commuters alike. The apps provided additional choices and more competitive booking fees for commuters, and enabled taxi drivers to get additional bookings from alternate sources, besides the booking platforms provided for by their own companies. Third party ride booking apps, a disruptive and controversial technology, were formally regulated in 2015. I quote from then Transport Minister Lui Tuck Yew that “the regulatory framework balances the need for consumer protection and the flexibility needed for innovation in the industry”.

11             One new area of collaboration for CCS with other government agencies is in the area of big data. Today, the rise of the digital economy has resulted in the use of large amount of data.  Data has given birth to new markets, players and business models. With data analytics, businesses can better understand their customers’ preferences and tailor experiences to their customer’s needs. However at the same time, the monopolisation of data can lead to businesses achieving significant market power and to possible abuses such as excluding competitors from data-driven markets. As such, in assessing data-driven markets, competition authorities will need to consider the special characteristics of such markets, such as the extent of network effects, multi-homing or single homing behaviour of consumers, and access to and substitutability of data.

12           To better understand the impact of big data on markets, CCS commissioned a study on the use of data and data analytics with a view to informing business about how competition can enhance the functioning of such markets. This study maps out an overview of the data and analytics landscape in Singapore, and summarises how competition policy and law may apply to data-driven industries. As data is closely linked with issues of privacy and intellectual property protection, CCS also worked with the Intellectual Property Office of Singapore (IPOS) and the Personal Data Protection Commission (PDPC) to address the implications of data protection and intellectual property laws on competition in these industries. This study will be further discussed at one of the panel discussions later in the Conference.

Competition policy and law in ASEAN

13           The ASEAN Economic Community, or AEC, was formally established in 2015 and is the realization of regional economic integration among the 10-ASEAN member states. The AEC Blueprint 2025 sets out strategic measures including strengthening the capabilities of competition authorities, facilitating the regular exchange of best practices, and promoting greater alignment of competition policy and law within ASEAN.

14           Consistent rules and enforcement among ASEAN Member States when dealing with identified growth sectors such as E-commerce will increase certainty for businesses across ASEAN, enhance intra-ASEAN trade and investment, and improve ASEAN’s competitiveness on a global scale. CCS has already been active in the international fora to encourage innovation by creating a stable and consistent environment for businesses, and will continue to support and encourage closer cooperation among ASEAN competition authorities and beyond.

15           CCS’s efforts include the organization of a Roundtable Discussion for the heads of competition authorities in ASEAN to share their experiences and challenges in handling E-commerce related competition cases, and to explore potential areas for cooperation among ASEAN competition authorities in the area of E-commerce.

16           In addition, CCS organized the International Competition Network (“ICN”) conference in 2016, where some 450 delegates convened, including senior government officials from around the world, as well as representatives of business and consumer groups, academia and the legal and economic profession. I am pleased to note that CCS is following up on these efforts and will be organizing an ICN workshop for ASEAN this Friday to discuss international best practices on due process and transparency and how they may contribute to furthering competition policy in the region.

E-Commerce                                                 

17           In this new age, e-commerce has become an indispensable element of the global economy. It has lowered barriers to entry and operating costs for businesses, allowing them better access to new markets and granting them greater flexibility in catering to fast-changing consumer preferences. CCS is also looking into this critical new area of growth.

18           I am sure all of us would have experienced, at one point or another, missing a delivery because no one was at home to receive the goods. This “last mile delivery”, is one of the biggest problems faced by delivery companies when making door-to-door deliveries. The delivery companies typically end up having to make additional trips to deliver the parcel or to return the parcel to the supplier. This reduces the efficiency of their deliveries and inevitably increases their business cost. In addition, consumers are inconvenienced and do not receive their goods on time.

19           This has led to the advent of parcel lockers, especially for the receipt of e-commerce purchases. CCS is part of a multi-agency workgroup currently looking into the large scale deployment of a nationwide common parcel locker system, or what we term as “Federated Lockers”, in or near residential areas within Singapore, to address these delivery challenges.

20           In ASEAN, the AEC Blueprint 2025 also recognizes the potential contributions of e-commerce to support regional economic integration, which can only be possible with well-functioning markets. The advancement of e-commerce has thus presented an increasing need for closer cross border collaborations between competition authorities. The harmonization of competition policy and law across borders is therefore crucial.

CCS’s Handbook on E-commerce and Competition in ASEAN

21           In line with the AEC Blueprint 2025, CCS has developed a regional handbook on e-commerce and competition that serves as a reference for ASEAN member states, on identifying and addressing potential challenges on competition law enforcement relating to e-commerce. The handbook incorporates contributions from various ASEAN competition authorities, on their expertise and experiences in dealing with competition issues in the e-commerce sector. The handbook aims to provide guidance and support in competition policy and law to businesses engaged in e-commerce across ASEAN so as to foster an e-level playing field for businesses, particularly those operating across borders.

Conclusion

22             As Singapore enters a new phase of growth and in this new economy where markets continue to evolve, I would like to encourage the audience to think about the role of competition policy and law in helping to achieve Singapore’s vision of a “vibrant nation of innovation and opportunity”.

23             I hope that the panel discussions today will be fruitful and engaging, and spark off a vibrant exchange of ideas in bringing Singapore forward in the drive towards Singapore’s next phase of innovation-driven growth.

24            I wish you a successful and engaging conference ahead. Thank you. 

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