8 March 2021
On 4 December 2020, Singapore's Competition Appeal Board (CAB) reduced penalties imposed on eight out of thirteen distributors of fresh chicken found to have engaged in cartel conduct in September 2018. The reduction in fines ranged from 20% to 70%.
What you need to know – key takeaways
While trade associations exist to facilitate legitimate forms of interaction between industry participants, they also present a high risk environment for information sharing and anti-competitive coordination.
Cartelists that are "passive" or "followers" are culpable for breaches of competition law, although having a passive or limited role in a cartel arrangement could be taken into account by the Competition and Consumer Commission of Singapore ("CCCS") as a mitigating factor when determining fines.
Only four appeals were made to the CAB (although eight appellants were involved in the proceedings because the Lee Say Group consisted of five entities).
A fifth appeal was filed by Kee Song Food Corporation ("Kee Song"), however this was dropped after Kee Song reached an agreement with the CCCS on the quantum of fine payable during an earlier stage of the hearing. The remaining four parties to the CCCS's decision who did not file appeals were leniency applicants.
Substantively, the appeals were made not only in respect of the quantum of financial penalties but also against the CCCS's findings that the parties had participated in anticompetitive behaviour.
The first issue before the CAB was whether each of the appellants had infringed section 34 of the Competition Act through their participation in:
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the Non-Aggression Pact ("NAP") – a market sharing agreement under which the appellants were alleged to have agreed not to compete for each other's customers; and
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Price Discussions – – the subject matter of those discussions included agreements with respect to the quantum and timing of price movements in relation to the sale and distribution of fresh chickens (including via the exchange of price information and future pricing intentions).
Based on the evidence before it, the CAB found there was insufficient evidence to establish that seven of the eight appellants had participated in the NAP. In the case of the remaining appellant, one of its directors had admitted during CCCS's witness examination process that it had participated in the NAP. With respect to the Price Discussions, the CAB upheld the CCCS's finding of infringement against all eight appellants.
The second issue for the CAB to consider was the appropriate amount of any financial penalties.
The CAB took into account several factors in re-assessing the penalties to be imposed on each of the appellants. Notably, the CAB corrected the CCCS's earlier proposition that a "mere passive or follower role" is not a mitigating factor. Having regard to the CCCS Guidelines on the Appropriate Amount of Penalty in Competition Cases 2016, the CAB held that a passive and limited role could amount to mitigating circumstances, and applied this principle in its re-assessment of penalties.
For further information, please contact:
Angie Ng, Partner, Ashurst
Angie.Ng@Ashurst.com
