doing business acroos asean – the competition and ... · the competition and antitrust...

Competition & Antitrust TeamDID: 65-6232 0111 / 0104Email:[email protected]© Rajah & Tann LLP 1

Doing Business Acroos ASEAN –The Competition And Antitrust ImplicationsMarch/April 2011Presentation by the Competition & Antitrust Team+65 6232 0111 / 0104

Competition & Antitrust Law Firm of the YearLawyers World Law Awards 2011

Corporate Governance Law Firm of the YearLawyers World Law Awards 2011

COMPETITION Law Firm of the YearDealMakers Award Winner 2010

COMPETITION Law Firm of the YearACQ Financial Magazine Country Law Awards 2008 2009 2010ACQ Financial Magazine, Country Law Awards 2008, 2009, 2010

‘Highly regarded practice’Practical Law Company (PLC) Which Lawyer?

Best of the Best Women Business Lawyers – For Corporate Governance & Competition and Antitrust – Kala AnandarajahEuromoney Guide to the World’s Leading Lawyers;

‘Kala Anandarajah … a leading authority in corporate governance, compliance and competition issues …’AsiaPacific Legal 500

Kala Anandarajah is ... is head of the competition and trade law practice group, one of the first of its kind in Singapore and is regarded as ‘very knowledgeable’ …

Who’s Who of Leading Practitioners Singapore

© Rajah & Tann LLP 2

Leading Competition and Antitrust Lawyer – Kala AnandarajahInternational Financial Law Review 1000; Euromoney Guide to the World’s Leading Competition And Antitrust Lawyers; The

International Who’s Who of Leading Competition lawyers

The ‘outstanding’ Dominique Lombardi brings over 10 years of experience relating to European competition laws to the table, having worked in-house and as a private lawyer in Paris.

Who’s Who of Leading Practitioners Singapore

‘…establishing a forte in competition and trade law, adding another capability to a multi-faceted teamAsia-Pacific Legal 500

Ian McEwin has been recognised as one of the world’s LEADING COMPETITION ECONOMISTS for the years 1998, 1999, 2000 and 2010.

Global Competition Review


Rajah & Tann LLP & The Competition & Antitrust Practice

A Tier 1 Practice with top-quality regional competition law work, boasting an international team including the ex-Chief Economist of

Rajah & Tann LLP is one of the largest full-service law firms in Singapore and the Asia Pacific. We are at the leading edge of Asian

the Singapore Competition Commission. An all-rounded Practice focusing on merger notifications/ challenges to compliance/ advisory to investigations/ handling raids/ appeals to the Competition Appeals Board to regulatory work, including d fti th Ai t C titi

law, having worked on many of the biggest and highest profile cases in the region. As a result, we've developed a near-instinctive understanding of the issues, opportunities and challenges facing those doing business here. We also have the reach and the

t d li ll t


drafting the Airport Competition Code. The only Practice voted Competition Law Firm of the Year - Singapore for 3 consecutive years from 2008 to 2010.

resources to deliver excellent service to clients all over the region, with offices in Shanghai, Kuala Lumpur and Laos, as well as specialist practice groups focusing on Japan, South Asia and Indonesia.

Sample Of Notable CasesNotifications• Acting for two major international music corporations in clearing

the licensing arrangement entered into between them.• Successfully obtained ruling in a confidential Notification for

Guidance in respect of an agreement between the largest local financial institutions and a major payment scheme operator in the financial industry in Singapore

Mergers• Obtained clearance for acquisition by Fresenius Medical Care Beteiligungsgesellschaft mbH / Fresenius Medical Care AG & Co. KGaA of 100% of the shares of Asia Renal Care, Limited, a company incorporated in the Cayman Islands and involved in the Renal Dialysis Business from Bumrungrad International Holdings (Hong Kong) Ltd the financial industry in Singapore.

• Successfully acted for Qantas Airways Ltd and British Airways Pte Ltd in obtaining a for their cooperation, as well as for Qantas Airways Ltd and Orangestar Holdings Pte Ltd for their cooperation.

Investigations• Succeeded in having the financial penalties imposed on 4 of

the Appellants substantially reduced in the first appeal decisions issued by the Competition Appeal Board in Singapore.

• Successfully acted for some parties in reducing fines in the first price fixing cartel in Singapore.

• Acted for the APRIL Group and various individual respondents

(Hong Kong) Ltd. •Acted for Fortis Global Healthcare Mauritius Limited on all Competition law related issues in its proposed (but failed) offer for all of the shares of Parkway Holdings Limited, a company listed on the Main Board of the Singapore Exchange Securities Trading Limited.•Advised as Singapore counsel for Oracle Inc on all Competition law related issues pertaining to the acquisition of Sun Microsystems, and for the Lonza Group in Singapore in relation to the share purchase with Genentech Inc.•Obtained clearance for acquisition of bonding wire business of Kulicke and Soffa Industries, Inc. by W.C. Heraeus GmbH; and for acquisition by Chartered Semiconductor Manufacturing Ltd. of Hitachi Semiconductor Pte Ltd. Ad i d i bidd (i l di th f l bidd Li


in relation to a paper cartel in Korea and Australia, and managed the settlement process as instructing counsel to effectively reach a satisfactory settlement in Australia, where inter alia the case against a number of the companies and all the individual respondents were dismissed.

• Acting as Singapore counsel for one of the largest cargo carriers in the global cartel investigation involving fuel surcharges, as well as for passenger carriers in the global cartel investigation involving fuel surcharges.

• Acting for a major party in the first dominance case in Singapore, and clearing them of any potential abuse.

• Acting in several on-going cartel investigations across the region.

•Advised various bidders (including the successful bidder, Lion Power Consortium, which included Marubeni and GDF, for the sale of the Senoko Pte Ltd), one of the larger Generation companies sold) on all 3 acquisitions of the Generation Companies in Singapore, which were sold by Temasek Holdings, on all aspects of merger and anti-competition concerns which fell under the purview of the Energy Market Authority jurisdiction, including engaging the Energy Market Authority and writing in for various exemptions.•Acting in several potential merger involving cross border mergers and implications in several countries across Asia.


What Does Competition Law Deal With?

•Competition Laws aim to create a fair business environment

•Competition Laws in all jurisdictions very similar although somevariations exist from country to country:

– Regulation of the structure of the market:• Prohibition of mergers that substantially lessen competition

– Regulation of the behaviour of market players in the market:• Prohibition of anti-competitive agreements (inc. cartels)• Prohibition of abuse of a dominant position

© Rajah & Tann LLP5

•N.B.: regulation of mergers not always provided for or beingimplemented at a later stage (see, Singapore, Indonesia, India forinstance).

Why Is It Important?

• Infringement to Competition Laws:– Result in drastic penalties for companies,– Permanent restrictions can be imposed on companies’ p p

business practices which would limit future commercial activities and represent a competitive disadvantage.

• Defending against charges of such violations will cost companies time and money and will be otherwise disruptive.

• Individuals can be affected as well:

– Penalties / Imprisonment


p

– Risks for directors / officers

• And well the DEAL

– Continuity

– Void


Competition / Business

• Decision to set a business in Asia:– Acquisition– Creation of a full-function joint-ventureCreation of a full function joint venture=> Merger Regime

• Once in the market:– Relationship with competitors– Relationship with customers=> Anti-competitive Agreements

• If dominant:


If dominant:– Agreements with competitors / customers– Unilateral decisions

=>Abuse of dominance

Competition Laws In The Region (Not Exhaustive)

• Australia: Trade Practices Act 1974 (amended and renamed Competition and Consumer Act 2010)

• India: Competition Act 2002 & Competition (Amendment) Act 2007• Indonesia: Law Concerning the Ban on Monopolistic Practices and Unfair

Business Competition 1999 p• Japan: The Act Concerning Prohibition of Private Monopolization and

Maintenance of Fair Trade, Act No.54 of 1947• Korea: Monopoly Regulation and Fair Trade Act 1980• Laos: Decree On Trade Competition 2004 • Mongolia: Law Of Mongolia On Prohibiting Unfair Competition• New Zealand: Commerce Act 1986• Pakistan: Ordinance No LII Of 2007 For Free Competition• Philippines: Constitution of 1987+ Revised Penal Code: prohibition of

combinations in restraint of trade• PRC: Anti-Monopoly Law 2007


• Singapore: Competition Act 2004 • Taipei China: Fair Trade Act (1991)• Thailand: Trade Competition Act 1999• Vietnam: Law on competition No 27-2004• Malaysia: Competition Act and Competition Commission Act – June 2010• Hong Kong: Competition Bill – July 2010


Mergers

Why Know About Merger Regime?

• Merger Regimes apply to many different types of operations from amalgamation to creation of joint-ventures

• Notification of a Merger may be compulsory depending on the g y p y p gcountry

• Compulsory notification => standstill obligation• If a Merger substantially lessens competition, the transaction may be

void and / or penalties may be imposed on parties

• Consequences:– Merger Regime impacts on timing


– Merger’s documentation must be drafted to take Merger Regime into account – condition precedents


What Is A Merger?

• Singapore:– a merger between previously independent undertakings

(amalgamation, absorption)i iti b d t ki f t f th d t ki– acquisition by an undertaking of assets of another undertaking

– creation by two or more undertakings of a full-function joint venture.• China:

– acquisition of control by an undertaking of one or more other undertakings through acquiring shares or assets; or

– acquisition of control by one or more undertakings (by contract or other means) of one or more other undertakings, or

– the acquisition of the ability to impose decisive influence on other undertakings.

• India:


• India:– merger or amalgamation of enterprises– acquisition of shares, voting rights or assets of any enterprise or

acquiring or agreeing to acquire– acquisition of control over management or control over assets of any

enterprise by one or more persons.

What Is A Merger?

• Indonesia:– a merger between previously independent undertakings

(amalgamation, absorption)i iti b d t ki f h f th d t ki– acquisition by an undertaking of shares of another undertaking.

• Thailand:– a merger (amalgamation, absorption)– acquisition of control by an undertakings of another undertaking

through acquisition of shares or acquisition of assets– ‘merger which has the effect of creating a new business’.

• Vietnam:l i f i


– merger or amalgamation of enterprises– acquisition of control by an undertakings of another undertaking

through acquisition of shares or acquisition of assets– Setting-up of a JV.


What Is Prohibited?

• Singapore:– Subtantial lessening of competition

• China:– Elimination or restriction of market competition

• India:– Appreciable adverse effect on competition

• Indonesia- Result in monopolistic practices and / or unfair business

competition• Thailand


Thailand- Creation of monopoly or unfair competition

• Vietnam- Combined market share > 50% unless exempt (prohibition) or

combined market share >30% and <50% (notification)

What To Do?

• Singapore:– No compulsory notification– Self-assessment

• China:– Compulsory notification based on turnover and / or market share

thresholds– Standstill obligation, ie merger cannot be implemented before a

decision has been made (min. 30 days)• India:

– Compulsory notification based on turnover thresholds– Standstill obligation

Indonesia:


• Indonesia:- Compulsory notification (post-completion) based on turnover / assets thresholds

• Vietnam:- Compulsory notification (if merged entity has between 30% and 50% market share)- Notification before the merger is carried out

• Thailand (not implemented)


Impact For Business

• Check with legal team whether there is a Merger Regime in place• Is the operation a merger?

– Define the ‘type’ of investment contemplated: acquisition,amalgamation, creation of a full function JV, etc?

– Define the rights and powers on / in the merged entity: votingrights, specific rights (veto, casting vote, power at board level, etc),legal or contractual rights, etc

• Assess obvious competition issues: are the parties competitors, whatare their market share, the market share of target, what will be the


key changes to the structure of the market,etc• Anticipate impact on timing

Anti-Competitive Agreements


Horizontal & Vertical Agreements

Supplier SupplierSupplier

Wholesaler

H O R I Z O N T A L

V

E

R

T

Horizontal and vertical agreementsbetween enterprises are prohibited if their object or effect is to APPRECIABLY / SIGNIFICANTLY prevent, restrict, di t t titi


Distributor

Customers

I

C

A

L

distort competition.

• Key ingredients of a prohibited horizontal agreement:

Horizontal Agreements – Esp Singapore

• Horizontal Agreements between enterprises which have the object

– Agreement

– Object / Effect

– Prevent, Restrict or Distort

to: – Fix Prices

– Fix Trading Conditions

– Limit or control:• Production• Market Outlets / Market Access


– Appreciably / Significantly • Technical or Technological Developments

• Investment

– Rig BidsMarket


Vertical Agreements – Rest Of ASEAN

• Key Ingredients of a prohibited vertical agreement:

• Examples:

– Agreement

– Different levels of the supply chain

– Object / Effect

– Prevent, restrict or distort

– Resale Price Maintenance: Fixed price / Minimum Price / Recommended price?

– Exclusive territory

– Exclusive purchase / Supply


Prevent, restrict or distort

– Appreciably / Significantly– Non-Compete

Competition Law In Contracts

• Does NOT Require– Offer– Acceptancep– Consideration

• Does NOT follow standard requirements for regular contracts– Parties– Property– Price– Writing


• Activities are analysed as being possible anti-competitive agreements and abuse of dominance.


Interplay Between Contract & Competition Law

• Agreement In Competition Law– Wider

• Agreement In Contract Law– 3 Ps + Certainty

– If prohibited, attracts:• Fines• Permanent/Partial restrictions• Opportunity Costs• Reputation• Private Action

– If breached, attracts• Damages• Permanent/Partial

restrictions• Opportunity Costs• Reputation


14 Electrical & Building Works CompaniesArisco

Bid-Rigging

Competition Commission Of Singapore

Pre-Agreed Bid Amounts And The Winning Bidder


Contracts For Electrical Maintenance,

Lights etc

Total Fine: S$187,592


Language Caught

• Handwritten message: ““Eric Lee - You can quote $2.1k and I will support $2.35k...””

• Handwritten messages on side of quotation: “Godfather this is my price pls let me and Ah Poa know how much to put in.”

• “Hi William Can u put this price tks. From victor & pls change the item no 1”

• Email 14 December 2006: “This is your price – no need to change already.”


Express Bus Agencies Association+

16 Coach Bus Operators

Price Fixing (R&T acted for 4 of the 6 appellants)

Minimum Selling Price of Bus Tickets

A Surcharge For Fuel & Insurance


Customers travelling to Malaysia & Southern Thailand

S$1.7 million –reduced to S$1.1 million by the CAB First Appeal to the CAB


Language Caught• Minutes of EBAA meeting 6 Oct 2004: “Standardize selling fare for Express Bus

Tickets - A minimum selling price is to be agreed by the members and thereafter in the event of any down sell due to promotional activities; a written notice is required to inform the association.”

• Minutes of EBAA meeting 4 May 2005: “…the decision still lies within the member itself and whether it is within their ability to do so”

• Minutes of EBAA meeting 1 June 2005: (the parties agreed to the following) “recommended selling prices from Singapore to different destinations”

• Circulars to bus operators for their “compliance and understanding”

“Q44. What do you mean controlling the pricing of fares to prevent express bus companies from “slashing each other throat”?


companies from slashing each other throat ?

A: Before the EBAA was formed in 2003/2004, Elson Yap (Transtar), Ken Lim (GR Travel), Leong Sing Keong (Alisan) and I would sometimes go for coffee break together at Golden Mile. During these meetings, we would talk about pricing of express bus tickets and agree to sell at a uniform price. However, later on, someone would start slashing prices and do not follow the agreement that we have made. Therefore forming an association would make it easier for everyone to discuss and control the pricing of the express bus tickets.”

Cheil Jedang

Price Fixing

DaesangAjinomotoTakeda Chemical

Industries

Price fixing / allocating customers / exchanging

information on sales figures for Nucleotides

EU Competition Commision


Ajinomoto (S$24.5 million); Cheil (S$4.8 million); Daesang (S$4 million) Ajinomoto fined highest for its size and deterrence.

Makers of food flavourings

Commision


Language Caught

• Daesang’s report of meeting: "everyone was thanked for their co-operation during 1995 which resulted in the effective implementation of Nucleotide price increases and everyone was asked to continue theirNucleotide price increases and everyone was asked to continue their co-operation in 1996 so as to further increase the Nucleotide prices. [ ] all participants showed their agreement by nodding or saying words to that effect".

• Business trip report: “Takeda said they were making P-meeting for nucleotides to avert severe competition which would be occurred by Miwon’s [Daesang] entry and asked us to support and join into the P-meeting”


• Ajinomoto internal memorandum: “we [Ajinomoto] as leading manufacturer as well as Takeda, have to take the lead in the price increase race, and therefore it is most likely to run against a head wind. However, it is inevitable that we have to take risks”.

Bioproducts

BASF

UCB

Akzo Nobel

Price Fixing

Set Prices And Shared Markets For Choline

ChlorideChinook DuCoa


Akzo (S$37 million); BASF (S$60 million); UCB (S$17.5 million). North American companies benefited from 5 year limitation period in EU.

Animal Feed Producers


Language Caught

• Agreement reached during meeting:

“Present profit situation in chemical companies asks for price increasesPresent profit situation in chemical companies asks for price increases in general.”

“Converters and distributors should be controlled by proper pricing.”

“Each CC producer is responsible in his home market in controlling converters. Supply of CC liquid from out of area undermines this rule and ruins the market.”

• Internal report from Chinook 23 Nov 1992:


p

“an accord was reached between the European and North American producers on November 16, 1992 in Ludwigshafen”

Archer Daniels

Price Fixing

Cheil

Kyowa Hakko

EU CompetitionCommision

Fixing prices and sales quotas / information exchange for

synthetic amino acids (Lysine)

P d f

y

AJINOMOTO


ADM (S$83.5 million); Ajinomoto (S$50 million). In EU, Ajinomoto applied for immunity but was ring-leader and did not disclose earlier cartel.

Producers of animal feed /

pharmaceuticals


Language Caught

• Telephone conversation: As to quantities, the participants concluded that “controlling volume will be a very tough issue”.

• Sewon stated in a letter that it was able to raise sharply the price of lysine, “with the help of (Ajinomoto)”

• ADM told the others that they had “to watch their telephones and to be very careful”


Language Caught - Other Cases

• Vietnam Case (Motor Insurance) – Agreement in Motor Insurance: “After discussing, the member insurance companies … have come to the cooperation agreement ” The Clause on car material insurancecooperation agreement… . The Clause on car material insurance premium rates was held to provide a unified formula for car material insurance service premium for the 19 investigated companies.

• EC Case (Professional Videotape) – Minutes of meeting: “Each company will make every effort not to back down and reduce their price, especially in the major countries such as the UK, Germany, France and Italy.”


• EC Case (Copper Plumbing Tubes) – Handwritten notes: “positive cooperation, no crash, no price war. market review United Kingdom, France, Spain, Scandinavia” investments that overlap are to be avoided as well as "overlapping war". The notes mention "workshops" "every 3 months" for "commercial" and "technical exchange/visits“


Abuse Of Dominance

ASEAN Guidelines On Competition Policy

• Scope of Competition Law may include abuse of a dominant position

• Dominant position:– Market power, either individually or collectively– ASEAN Member States may consider including a market

threshold test in the law, whether prescriptive or indicative

• Abuse:– ‘It is prudent to consider the actual or potential impact of the

conduct on competition instead of treating certain conduct by dominant enterprises as automatically abusive’


dominant enterprises as automatically abusive .


Illustration - Indonesia

• Dominant position defined in terms of market share in the Law:– Market share of one enterprise≥ 50%; or– Market share of 2 or 3 enterprises ≥ 75%p

• SMP and Dominant position dealt with under a number of articles in the Law:– Prohibition of cross-share ownership if leads to 50% market share– Prohibition of monopoly / monopsony

• Abuse:– Imposing trade terms with the intention of preventing consumers

to acquire competitive products (in terms of prices or quality, li iti k t / t h l d l t k t f l


limiting market / technology development, market foreclosure• Cases:

– Abuse: ABC battery case– Share ownership: Temasek case– Monopoly: Carrefour case

Illustration - Singapore

• Dominant position not defined in the Law but in Guidelines issued by the CCS:– Market power , ie ability to profitably sustain prices above p , y p y p

competitive levels– Market power determined by looking at, inter alia, the number and

strength of actual and potential competitors, entry barriers in the relevant market (including sunk costs, network effects, etc), the strength of the buyers and the structure of the buyers’ side of the market

– Indicative market share: ≥ 60%Ab


• Abuse:– Predatory behaviour, limiting production, markets, technical

development, discrimination, tying• Cases:

– Abuse: Sistic case– Investigation: NETS cases


SiSTiC Tickets Only SiSTiC Tickets Only

$

17 Event Organisers and 2 Venues


Fine: almost S$1 million Order to amend existing contracts

Language That Raised Concerns

• TECL appointed SISTIC as its exclusive ticketing agent for the sale and distribution of tickets, and further undertook not to grant the right to sell tickets for any events held in the Esplanade venues or such othertickets, for any events held in the Esplanade venues or such other venues as agreed between both parties...

• Under 2008 ASTA, this restriction was broadened to include the sale and distribution of any tickets for any event held in the Esplanade venues by persons using a computerised ticketing network service of a third party

• In the ATS, SSC agreed to appoint SISTIC as the sole and exclusive


, g ppagent for the sale of tickets for each and every show staged by hirers of the SIS.


No DiscountsDiscount on merchant

service charge

Merchants taking NETS only

Merchants taking otherforms of payment

g


No Infringement Found

y forms of payment

Illustration - Thailand• Dominant position:

– Law refers to market share and sales volume (thresholds in separate implementing regulation) +conditions of competition in the market

– Thresholds:Market share of one enterprise≥ 50% and at least 1,000 million Baht in turnover; orCombined market share of top 3 enterprises ≥ 75% and at least 1,000 million Baht in turnoverExclusion of enterprises with less than 10% market share or turnover below 1,000 million Baht

• Abuse:


• Abuse:– Unfair prices, terms, conditions, limiting production– Also, ‘intervening in the operation of business of other persons

without justifiable reasons’• Case:

– No case since dominance has been defined by regulation– Chang Beer case: tying sales of liquor with purchase of beer


Illustration - Vietnam

• Dominant position defined in the Law:– Market share ≥ 30%, or– Enterprise capable of substantially restraining competition– N.B. on market share: 2 enterprises ≥ 50%; 3 enterprises ≥ 65%;

4 enterprises ≥ 75%– Distinction between abusing a DP or a monopoly position

• Abuse:– Predatory prices, limiting production, discrimination, tying and

generally market foreclosure


• Cases:– Vinapco, an affiliate of state-owned Vietnam Airlines, fined VND3

billion for ceasing supplying jet fuel to Jetstar Pacific + proposal to separate Vinapco from Vietnam Airlines

Illustration – Malaysia (Not In Force)

• Dominant position defined in the Law:– Situation in which one or more enterprises possess such

significant power in a market to adjust prices or outputs or trading terms, without effective constraint from competitors or potential competitors

– Law provides that market share alone shall not in itself be conclusive in determining whether enterprise is dominant

• Abuse:– Unfair prices, terms or conditions, limiting production, markets,

technical development, refusal to supply, discrimination, tying, buying up a scarce supply of intermediate goods or resources


buying up a scarce supply of intermediate goods or resources required by a competitor

• Case:– Law to come into force on 1 January 2012


Outside ASEAN - China

• Dominant position: factors for determining dominance are set out in the Law, including market share thresholds– Factors include, inter alia, undertaking’s market share and market

position , undertaking ‘s financial and technical status, undertaking’s ability to control sales market, entry barriers, etc

– Market share threshold:Market share of one undertaking≥ 50%;Market share of 2 undertakings ≥ 66.6%; orMarket share of 3 undertakings ≥ 75%

• Abuse:– In the law: excessive prices predatory prices refusal to deal


– In the law: excessive prices, predatory prices, refusal to deal, exclusive dealing, discrimination, tying …and other activities as set out by the competition authorities

– In ‘guidelines’: refusal to deal, etc• Cases:

– So far, decisions only issued by Courts further to private action. Eg. Baidu case

Outside ASEAN – Japan / Korea

Japan• Different approach:

– Prohibition of private

Korea• Dominant position: turnover

and market share + entry monopolization / monopolistic situations (market share)

– Prohibition of abuse of dominant bargaining position

• Abuse: predatory prices, exclusive dealings, tying, discrimination, refusal to supply

• Cases:

barriers, size of competitors etc

• Abuse: price abuse, output control, obstructing competitors’ business activities, blocking market entry by new competitors, excluding competing companies


• Cases:– Microsoft

• N.B. : JFTC issued Guidelines for Exclusionary Private Monopolization under the Antimonopoly Act in October 2009 due to changes to the Law

competing companies, undermining consumer interests

• Cases:– Qualcomm


What Happens On Breach?

Breach Of Contract – Private Law Suit

• Plaintiff:– Contract Formed– Damages

• Defendant– Contract never formed– Anticipatory Repudiation


Damages– Common law remedy of

an action for a fixed sum– Specific Performance– Injunction

Anticipatory Repudiation– Frustration– Other Defenses


Breach Of Competition Laws - Investigation

• Competition Commission: • All defendants


Competition Commission:– Anti-competitive

Agreement

– Abuse of Dominance

All defendants– No Agreement– No Dominance– If dominance, no abuse– Exempted Agreement /

Conduct

Private Action

• All defendants– No Violation

No Harm

• Private Action Claimants– Violation of competition laws– Damage Suffered


– No HarmDamage Suffered– Class Action– Brought by any person who

suffers loss or damage directly from violation

– Dealt directly / indirectly with infringing party


• Scope of Agreement – wider than mere 3Ps and certainty

• Watching language – drafting and speaking

Summary - Quick Points To Be Alert To

g g g g p g

• Business and commercial issues to be carefully documented

• Understanding markets, which requires understanding business critical – cursory level Is not sufficient!

• Proper paper trail


• Usefulness of legal privilege

• Leniency applications that others can make against you

Final Words


Information Exchange / Sharing

RBS’ Professional Practices Coverage Team unilaterally disclosed only to Barclays, generic and specific confidential future pricing information on loan products sold to accountants, lawyers and real estate firms. Barclays took information into account in determining its

i i


S$60 million in total fines.

own pricing. Disclosures - in the course of a number of contacts on the fringes of social, client or industry events or through telephone conversations.

Impact On Directors / Officers

•Singapore: no individual liability under Competition Act – except forproviding false or misleading information etc•Other jurisdictions: individuals may be personally liable for breach ofCompetition Laws

•HOWEVER:– Directors: may be liable vis-à-vis company for not acting in the best

interest of the company– Officers: non-cooperation with CCS may lead to penalties



• Creates awareness

• Helps avoid infringements

Why Is A Compliance Program Important?

• Considered to be a mitigating factor when determining finalpenalties amounts (Australia, Singapore and UK)

• How:• Review contracts• Conduct audits


• Restructure practices• Compliance Manuals – 50 pages? Or practical guidance?

Make compliance part of the company’s business culturebusiness culture

From the topCommunicating down and to all



THANK YOU

For more information, please contact:

Competition & Antitrust PracticeDID: +65 6232 0111 / +65 6232 0104


Fax: +65 6225 7725Email: [email protected]

[email protected]: www.rajahtann.com

doing business acroos asean – the competition and ... · the competition and antitrust...

Documents