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SINGAPORE: The High Court has overturned a ruling by the Competition Appeal Board, reinstating a decision by the Competition and Consumer Commission of Singapore (CCS) that two warehouse operators breached competition law by exchanging information on planned price increases.<\/p>\n
In a judgment issued on Jun 30, the court allowed CCS’ appeal and found that the two warehouses \u2013 CNL Logistic Solutions and Gilmon Transportation & Warehousing \u2013 had infringed Section 34 of the Competition Act by sharing information about their intention to impose a surcharge.\u00a0<\/span><\/p>\n The case stemmed from an investigation conducted by CCS into four warehouse operators at Keppel Distripark.\u00a0<\/span><\/p>\n In November 2022, the competition watchdog issued a decision on the infringement, after finding that representatives from the companies had communicated in June 2017 about plans to introduce a Free Trade Zone (FTZ) surcharge at the same rate as the largest warehouse operator.<\/span><\/p>\n CCS said the companies then used that information during negotiations with customers before all four operators eventually imposed the same surcharge.\u00a0<\/span><\/p>\n Following its investigation, it imposed financial penalties totalling S$2.8 million on the four companies.<\/span><\/p>\n CNL and Gilmon appealed the decision in January 2023, and the Competition Appeal Board ruled in their favour in July last year.<\/span><\/p>\n The board said that CCS had not sufficiently considered the economic context of the case, including the companies’ relatively small shares of the warehousing market at Keppel Distripark.<\/span><\/p>\n CCS later appealed that ruling.\u00a0<\/span><\/p>\n The High Court found that CNL and Gilmon had exchanged information about competitors’ pricing strategies and intentions, and had relied on that information to persuade customers to accept the surcharge.<\/span><\/p>\n It rejected the companies’ argument that their limited market power meant that their conduct could not have harmed competition.\u00a0<\/span><\/p>\n The court also noted that the exchanges were not merely casual conversations \u2013 they enabled the companies to overcome their individual weaknesses and improve customer acceptance of the price increase.<\/span><\/p>\n Following the latest judgment, Mr Alvin Koh, chief executive officer of CCS, said the ruling was a reminder that businesses must set their prices independently and should not coordinate with competitors or exchange confidential information on future prices or pricing intentions.<\/span><\/p>\n Even businesses with relatively small market shares may infringe the Competition Act if they engage in such conduct.\u00a0<\/span><\/p>\n CCS will continue to take firm action against anti-competitive conduct to protect competition and consumers in Singapore, Mr Koh added.<\/span><\/p>\n Even though not all exchanges of information between competitors are anti-competitive, businesses should be particularly cautious when discussing confidential or strategic information, CCS cautioned.<\/span><\/p>\n This is especially when plans relate to future prices or price changes, because such exchanges are likelier to breach the Competition Act.<\/span><\/p>\n It also advised companies to ensure that employees understand what information they can and cannot share with competitors.\u00a0<\/span><\/p>\n