Cartel leniency in Singapore: overview

A Q&A guide to cartel leniency law in Singapore.

The Q&A gives a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities. In particular, it covers the conditions to be satisfied, the method of making an application, availability of immunity from civil fines to individuals, the scope of leniency, circumstances when leniency may be withdrawn, leniency plus, confidentiality and disclosure, and proposals for reform.

To compare answers across multiple jurisdictions visit the Cartel leniency Country Q&A tool.

This Q&A is part of the global guide to competition and cartel leniency. For a full list of jurisdictional Cartel Leniency Q&As visit www.practicallaw.com/leniency-guide.

For a full list of jurisdictional Competition Q&As, which provide a high level overview of merger control, restrictive agreements and practices, monopolies and abuse of market power, and joint ventures in multiple jurisdictions, visit www.practicallaw.com/mergercontrol-guide and www.practicallaw.com/restraintsoftrade-guide.

Marina Chin, Tan Kok Quan Partnership
Contents

Regulation

1. What laws provide for a leniency programme and which regulatory authority administers it? Is there any published guidance?

Applicable laws and guidance

The Competition Act (Cap. 50B) governs competition law in Singapore. The Competition Commission of Singapore (CCS) enforces and administers the Competition Act.

Section 34 of the Competition Act prohibits anti-competitive behaviour in the form of cartel activities, such as price fixing and market sharing. Section 34 prohibits agreements between undertakings and decisions by associations of undertakings or concerted practices, which have as their object or effect the prevention, restriction or distortion of competition within Singapore.

The CCS administers a leniency programme which provides lenient treatment for undertakings which voluntarily provide information on cartel activities to the CCS. This leniency programme was implemented on 1 January 2006. While the programme is not provided for in the Competition Act, it is set out in guidelines. The current version is the CCS Guidelines On Lenient Treatment For Undertakings Coming Forward With Information On Cartel Activity Cases 2009 (Leniency Guidelines).

 

Scope of application

2. What infringements of competition law does the leniency programme cover?

The leniency programme in Singapore applies to infringements of section 34 of the Competition Act, which prohibits cartel activities.

The prohibitions on cartel activities under section 34 of the Competition Act are purely administrative and infringements of section 34 do not attract criminal sanctions.

 

Recent cases

3. What notable recent cases have applied the leniency programme?

The leniency programme has been applied in three notable cases in Singapore:

  • On 4 June 2010, the CCS issued an infringement decision against 14 electrical and building works companies. These companies had colluded to submit bids for electrical or building works projects. The CCS started its investigations into the cartel only after receiving information from Arisco, which was one of the companies involved. Having met all the conditions of the leniency programme, Arisco was granted total immunity from financial penalties.

  • On 27 May 2014, the CCS issued an infringement decision against four Japanese bearings manufacturers and their Singapore subsidiaries. These companies were competitors but had met regularly to exchange information and discuss and agree on sales prices so as to maintain their respective market shares. The CCS started its investigations into the cartel only after receiving information from Koyo, which was one of the companies involved. Two other companies, NSK and Nachi, also provided information subsequently. Koyo was the first company to notify the CCS before investigation, and was granted full immunity from financial penalties. NSK and Nachi were granted reductions of up to 50% of their financial penalties.

  • On 11 December 2014, the CCS issued an infringement decision against 11 freight forwarders and their Singapore subsidiaries. These companies had collectively fixed fees and surcharges and had exchanged price and customer information in relation to their freight forwarding services for shipments from Japan to Singapore. The CCS started its investigations only after receiving information from DHL Global Forwarding, which was one of the companies involved. DHL Global Forwarding was granted full immunity from financial penalties under the leniency programme, while four other companies were granted reductions to their respective financial penalties.

 

Availability of leniency

Administrative liability

4. Is full immunity from administrative penalties available? What conditions must be met for immunity to be granted?

The CCS will grant an undertaking the benefit of total immunity from financial penalties if the undertaking is the first to provide the CCS with evidence of the cartel activity before an investigation has commenced, where the CCS does not already have sufficient information to establish the existence of the alleged cartel activity.

The undertaking must also:

  • Provide the CCS with all the information, documents and evidence available to it regarding the cartel activity.

  • Maintain continuous and complete co-operation throughout the investigation and until the conclusion of any action by the CCS arising as a result of the investigation.

  • Refrain from further participation in the cartel activity from the time of disclosure of the cartel activity to the CCS (except as may be directed by the CCS).

  • Not have been the one to initiate the cartel.

  • Not have taken any steps to coerce another undertaking to take part in the cartel activity.

 
5. Is there a sliding scale of available leniency from administrative penalties?

If an undertaking does not qualify for total immunity because an investigation has already begun (see Question 4), it may still benefit from a reduction of up to 100% in the financial penalty, if:

  • The undertaking seeking immunity is the first to provide the CCS with evidence of the cartel activity.

  • This information is given to the CCS before the CCS has sufficient information to issue a written notice of a decision that the section 34 prohibition has been infringed.

  • The other conditions are satisfied (see Question 4).

Any reduction in the level of the financial penalty is discretionary. The CCS takes into account:

  • The stage at which the undertaking comes forward.

  • The evidence already in the CCS' possession.

  • The quality of the information provided by the undertaking.

Subsequent leniency applicants who provide information on cartel activities before the CCS issues a written notice a decision that the section 34 prohibition has been infringed, but are not the first to do, so may be granted a reduction of up to 50% in the financial penalty. There is no limit on the number of such subsequent leniency applicants. The other conditions (see Question 4) must be satisfied and the amount of reduction under such circumstances is discretionary.

 
6. Is immunity or leniency for administrative penalties available to individuals? If so, what conditions apply?

There are no penalties applicable to managers and employees of undertakings involved in cartel activities and therefore there is no leniency programme applicable to them. However, there is an avenue for individuals to report cartel activities and monetary awards may be paid to informants in appropriate cases.

If an individual does not co-operate with an undertaking which is applying for leniency, the amount of reduction in the level of the financial penalty may be affected. The Leniency Guidelines requires the undertaking applying for leniency to provide the CCS with all the information, documents, and evidence available to it regarding the cartel activity and to maintain continuous and complete co-operation throughout the investigations by the CCS. This is likely to include the undertaking making relevant persons in the organisation available to the CCS for purposes of the investigations.

 

Criminal liability

7. Is immunity or leniency available for companies and/or its employees in relation to criminal prosecution? What are the implications for employees when an undertaking has been granted immunity or leniency?

Circumstances

It is not a criminal offence under Singapore law to participate in a cartel and therefore the leniency programme does not cover criminal prosecution.

Proceedings against employees

It is not a criminal offence under Singapore law to participate in a cartel.

It may be possible for directors of companies involved in cartels to be found in breach of their duties, which would be a criminal offence under section 157 of the Companies Act (Cap. 50). However, the leniency programme only applies to financial penalties under the Competition Act and does not cover criminal prosecutions.

Employees' interests

Employees and managers of undertakings are not affected because the Competition Act does not attach direct legal liability to such individuals for their participation in cartels.

Employees and managers of undertakings are not obliged to co-operate with the undertaking in its leniency applications. However, if these individuals do not comply with directions or requirements of the CCS in relation to investigations, they may be liable for offences under sections 65(6), 75, 76, 77, 78, and 80 of the Competition Act.

 

Application proceedings

8. When should an application for leniency be made?

An application for leniency should be made as soon as possible. This is because the first undertaking to provide the CCS with information on cartel activities before an investigation has begun may be granted total immunity from financial penalties. Even if an investigation has begun, an undertaking that is the first to apply may still be granted a reduction in financial penalties of up to 100% if the information is provided to the CCS before the CCS has sufficient information to issue a decision that section 34 has been infringed.

 
9. What are the procedural rules for leniency applications?

Relevant authority

The application must be submitted to the CCS.

Applicant

Any individual or entity can make an application for leniency, if it has the authority to represent the undertaking.

Informal/confidential guidance

An undertaking can initiate contact with the CCS anonymously by telephone to find out if leniency is available. If the undertaking provides a general description of the industry or market, the CCS officers are able to provide information on whether there is already a prior application for leniency. However, for the leniency application to be recorded and proceeded with, as a minimum, the undertaking's name and a clear description of the cartel conduct must be given to CCS.

Form of application

An application for leniency may be made using the Leniency Programme Online Form on the CCS website. Supporting documents must be submitted by email to ccs_leniency@ccs.gov.sg.

Alternatively, undertakings can send the completed CCS Leniency Application Forms along with the supporting documents to the CCS by email or post. Undertakings can also set up appointments to meet up with CCS officers in person.

Markers

A marker system is available for undertakings to secure their position in the queue for leniency if they are unable to provide all evidence relating to the cartel activities at the time of the submission of the leniency application. The grant of a marker is discretionary, but the CCS has indicated that it is expected to be the norm rather than the exception.

To secure a marker, the undertaking must provide the name of the business and a description of the cartel activities in sufficient detail for the CCS to determine if any other undertakings have already applied for leniency. If no other undertaking has done so, the undertaking would secure a marker for total immunity or a 100% reduction in the financial penalties.

There is a limited time period following the securing of the marker in which the undertaking must gather the necessary information and evidence and provide them to the CCS in order for the marker to be perfected. If the undertaking fails to perfect the marker, the next undertaking in the queue is then allowed to perfect its marker in order to be granted total immunity or a 100% reduction in financial penalties.

Once the marker is perfected, the other undertakings in the queue are informed to allow them to decide whether to submit leniency applications for eligibility for a 50% reduction in financial penalties.

The marker system only applies to marking the first position in the queue and does not apply to subsequent positions.

Information/evidence

Applicants must provide the CCS with all information and evidence relating to the cartel activities available to them at the time of the submission of the application. At the minimum, the undertaking must provide information so as to provide the CCS with a sufficient basis to proceed with credible investigations or to add significant value to the investigations.

Oral statements

Initial contact can be made with the CCS by telephone. Undertakings can also set up meetings with the CCS officers in person to make leniency applications.

Short-form applications

Not applicable.

 
10. What are the applicable procedures and timetable?

The Leniency Guidelines do not provide timelines with regard to how applications for immunity would progress.

Generally, an undertaking establishes initial contact with the CCS anonymously to determine if leniency is still available. If the undertaking determines that it wishes to take advantage of the leniency programme, it should submit a leniency application as soon as possible. If it is unable to provide all evidence relating to the cartel activities at the time of the submission of the leniency application, the undertaking should seek to secure a marker and then perfect the marker within the stipulated time period.

The CCS reviews the leniency application on receipt and usually arranges to meet with the undertaking to obtain more information on the cartel.

 

Withdrawal of leniency

11. In what circumstances and at what stage of the proceedings can leniency be withdrawn? What implications does the withdrawal of leniency from one company have for other applicants?

Before leniency is granted, prior favourable indications can be withdrawn. Subsequent applicants must still fulfil the same conditions to secure the leniency sought.

 

Scope of protection

12. What is the scope of leniency protection after it has been granted?

Leniency protection applies to all financial penalties even where the CCS collects further evidence of infringement, provided that all the relevant criteria have been fulfilled (see Questions 4 and 5).

 
13. Does the competition authority offer any further reduction in fines for an undertaking's activities in one market if it is the first to disclose restrictive agreements and practices in another market (leniency plus)?

The Leniency Guidelines also provide for a leniency plus regime in situations where an undertaking co-operating with an investigation by the CCS in relation to cartel activities in one market is also involved in cartel activities in another market and provides the CCS with information on the cartel activities in that second market.

If it qualifies under the leniency plus regime, an undertaking would be able to enjoy a further reduction in financial penalties in relation to the first market, where it is not already qualified for total immunity or a reduction of 100% in financial penalties in that market.

To qualify for leniency plus, the CCS would have to be satisfied that:

  • The evidence provided by the undertaking relates to a completely separate cartel activity.

  • The undertaking would qualify for total immunity from financial penalties or a reduction of up to 100% in the financial penalty in relation to its activities in the second market.

 
14. Does the grant of leniency affect a third party's ability to bring a follow-on damages action against a leniency applicant?

Securing leniency does not protect an undertaking from other consequences of infringing section 34 of the Competition Act, such as:

  • The fact that infringing provisions of any cartel agreements are void and therefore cannot be enforced.

  • The possibility that third parties may have a claim under a private right of action.

 

Confidentiality and disclosure

15. What are the rules relating to confidentiality during a leniency application?

Identity disclosure

The identity of an undertaking that applies for leniency is kept confidential by the CCS to the extent that is consistent with the CCS' obligations to disclose or exchange information. This confidentiality is maintained throughout the course of investigations. However, the identity of the applicant undertaking is disclosed when the CCS issues a written notice of its decision that section 34 of the Competition Act has been infringed.

Information disclosure

The Leniency Guidelines are silent as to whether information provided by an applicant would be passed on to other undertakings under investigation.

Confidentiality requests

Under section 89(3) of the Competition Act, an applicant can provide reasons to request the CCS to treat information furnished as confidential. However, such information is still subject to disclosure if it is either:

  • Necessary for the performance of any function or discharge of any duty of the CCS under the Competition Act.

  • Lawfully required by any court or the Competition Appeals Board, or lawfully required or permitted under the Competition Act or any other written law.

 
16. What are the rules concerning disclosure of statements made in support of a leniency application?

Domestic submissions and domestic discovery

Domestic submissions are not protected against disclosure or discovery in domestic courts. If submissions are relevant and necessary for a fair disposal of a matter, they would generally have to be the subject of discovery.

Domestic submissions and foreign discovery

Whether domestic submissions are protected against disclosure or discovery in foreign courts depends on the rules of discovery in the foreign court.

Foreign submissions and domestic discovery

Foreign submissions are not protected against disclosure or discovery in domestic courts. If they are relevant and necessary for a fair disposal of a matter, they would generally have to be the subject of discovery.

 

Inter-agency co-operation

17. Does the regulatory authority in your jurisdiction co-operate with regulatory authorities from other jurisdictions in relation to leniency? If so, what is the legal basis for and extent of co-operation?

The CCS does not have any standing co-operative agreement with regulatory authorities from other jurisdictions in relation to the leniency programme.

 

Proposals for reform

18. Are there any proposals for reform?

There are no proposed reforms at present.

 

Online resources

Competition Commission of Singapore

W www.ccs.gov.sg

Description. The official website of the Competition Commission of Singapore, contains the latest guidelines on competition law in Singapore.

Singapore Statutes Online

W http://statutes.agc.gov.sg/aol/home.w3p

Description. The official website of the Singapore Attorney-General's Chambers, contains all Singapore statutes.



The regulatory authority

Competition Commission of Singapore (CCS)

Head. Aubeck Kam Tse Tsuen, Chairman
Contact details. 5 Maxwell Road, #09-01 The URA Centre, Singapore 069118
T +65 6325 8206
F +65 6224 6929
E ccs_feedback@ccs.gov.sg
W www.ccs.gov.sg

Responsibilities. The CCS' responsibilities include:

  • Maintaining and enhancing efficient market conduct and promoting the overall productivity, innovation and competitiveness of markets in Singapore.
  • Eliminating or controlling practices having adverse effect on competition in Singapore.
  • Promoting and sustaining competition in markets in Singapore.
  • Promoting a strong competitive culture and environment throughout the economy in Singapore.
  • Acting internationally as the national body representative of Singapore in relation to competition matters.
  • Advising the Singapore government or other public authority on national needs and policies in relation to competition matters.

Person/department to apply to. Applications are to be made directly to the Competition Commission of Singapore.

Procedure for obtaining application documents. Application documents are available at the Competition Commission of Singapore website.



Contributor profiles

Marina Chin, Joint Managing Partner

Tan Kok Quan Partnership

T +65 6496 9510
F +65 6324 5525
E marinachin@tkqp.com.sg
W www.tkqp.com.sg

Professional qualifications. Advocate & Solicitor of the Supreme Court of Singapore (since 14 March 1990); Notary Public; Commissioner for Oaths

Areas of practice. Arbitration; commercial disputes; competition; defamation; employment; family; insolvency; private banking disputes; property; shareholders' disputes; trusts.

Languages. English, Malay

Professional associations/memberships. Law Society of Singapore; Singapore Academy of Law.

Publications. Contributor to past and present editions of The Singapore Court Practice and Singapore Precedents of Pleadings.


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