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In brief

The Competition and Consumer Commission of Singapore (CCCS) has issued an infringement decision (“Infringement Decision“) against three businesses engaged in the provision of maintenance services for water features. CU Water Services , Crystalene Product (S) and Crystal Clear Contractor (“Parties“) were directed to pay financial penalties totalling approximately S$420,000 for infringing section 34 of the Competition Act (Cap. 50B) and for participating in bid-rigging conduct relating to tenders called for the provision of maintenance services for pools, ponds, etc.


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The Infringement Decision is the CCCS’s second infringement decision on bid-rigging this year (see our previous client update for more information on the first decision) and represents the CCCS’s increasing scrutiny on bid-rigging conduct.

In the CCCS’s media release relating to the Infringement Decision (see the CCCS’s media release for more information), the Chief Executive of the CCCS made it clear that bid-rigging is significantly harmful, and tenderers must independently prepare their bids and avoid coordinating their bids in an anti-competitive manner. Tenderers should reject any proposal to coordinate bids by publicly distancing themselves from such proposals. The CCCS also highlighted that any businesses engaged in a cartel should consider making a leniency application, to potentially benefit from a full/partial waiver of financial penalty.

In light of the above, businesses are reminded to implement competition compliance policies and practices, and regularly conduct competition compliance training and audits, to ensure that employees are well-versed on the out-of-bounds markers surrounding competition law. The CCCS has also made it clear that it will take swift and decisive action against any party engaged in hard-core cartel conduct such as bid rigging, price fixing, market sharing and production control.

When procuring goods and services, businesses should also consider implementing transparent procurement practices, including centralising the handling of tenders and calling of open tenders to encourage more participation from bidders (see the CCCS’s media release for more information on a previous bid-rigging decision).

For more information and to discuss what this development might mean for you, please get in touch with your usual Baker McKenzie contact.

In more detail

The CCCS commenced its investigation into the bid-rigging conduct in September 2017. After conducting unannounced inspections at the Parties’ premises, the CCCS promptly received leniency applications from Crystalene and Crystal Clear. The CCCS discovered that the bid-rigging conduct involving the Parties commenced in 2008.

In bidding for a project, the incumbent party (Party X) servicing the privately owned developer will typically request another party (Party Y) to submit a fake/cover quotation that is priced no lower than Party X’s quotation, in order to create the appearance that Party X’s services are more affordable. At times, when approached by a privately owned development, Party Y would discuss with Party X the price to quote before putting forth a quotation that is priced higher than Party X’s. Such bid-rigging conduct resulted in the lack of competitive pressure between the Parties and created the false impression that the quotations the Parties put forth were part of a competitive bidding process.

Taking into account the seriousness of bid-rigging, the CCCS took the position that the base penalties ought to start at the higher end when exercising its margin of discretion. However, given that Crystalene and Crystal Clear were leniency applicants who benefitted from reductions in financial penalties, the financial penalties that the CCCS imposed totalled to approximately S$420,000 only.

Author

Author

Hari is a principal in the Competition & Antitrust Practice Group at Baker McKenzie Wong & Leow. His practice covers competition law and regulation-related advisory work in Singapore and the Southeast Asia region. Hari was the Director of the Enforcement Division at the Competition and Consumer Commission of Singapore ("CCCS"), where he supervised the CCCS’s Intelligence Unit and IT Forensics Taskforce, in addition to the supervision of case teams on various investigations, mergers and notifications. He was also responsible for managing leniency applications made to the CCCS, overseeing the secret complainant and reward schemes, planning and executing dawn raids, and recording investigative statements of persons under investigations. Hari led teams involved in defending appeals brought against the CCCS’s decisions before the Competition Appeals Board. Prior to joining the Baker McKenzie Wong & Leow, Hari completed stints in private practice and as a Justices' Law Clerk with the Singapore Legal Service.

Author

Lip Hang Poh is a Competition Economist in Baker McKenzie's Singapore office.

Author

Jordan Tong is an associate in Baker & McKenzie.Wong & Leow Singapore office.