Knowledge Highlights 10 September 2020
On 10 September 2020, the Competition and Consumer Commission of Singapore (“CCCS”) released a report setting out the findings and recommendations from its market study on e-commerce platforms. CCCS’s market study focused on e-commerce platforms that generally have the following core characteristics:
- The business operates at least one multi-sided platform.
- The platform facilitates e-commerce as its primary activity.
- The platform business operates in more than one market segment in Singapore, offering distinct products and/or services.
Updating of competition guidelines
As the market study had identified certain areas where further clarity and guidance by CCCS could be beneficial to assist businesses in the application of the Competition Act in the digital space, CCCS intends to update its competition guidelines to clarify the following:
- Defining the market for multi-sided platforms, including specific features of multi-sided platforms (e.g. number of markets to be defined, indirect network effects, price structure) that may be taken into consideration as well as how consumption synergies may be taken into account when assessing whether there is a “product ecosystem” comprising multiple products and/or services sold by the same seller.
- Assessment of market power and abuse of dominance, including relevant factors (e.g. control of data) that may be considered in assessing market power and potential new theories of harm such as “self-preferencing”.
- Assessment of mergers and acquisitions, where one or more of the firms to the merger are important innovators that may change competitive dynamics even if they do not have a large market share, or involving firms that operate in different product markets (i.e. conglomerate mergers).
CCCS is conducting a public consultation from 10 September 2020 to 8 October 2020 to seek comments and views on proposed amendments to six CCCS Guidelines on the Competition Act. For information about CCCS’s public consultation on the proposed amendments to the competition guidelines, please read our article titled “CCCS seeks views on proposed changes to six competition guidelines”.
Consumer protection findings and recommendations
CCCS found that providing a good customer experience and fostering trust to sustain business from consumers are vital to the success of e-commerce platforms. This has encouraged e-commerce platforms to put in place measures to earn and keep consumer trust, and to protect consumers from unfair practices. As the intermediary between sellers and consumers and sometimes as a direct seller to consumers, e-commerce platforms play an important role in safeguarding consumers’ interests.
However, CCCS also found some consumers to have encountered unfair practices on some e-commerce platforms. The most commonly reported unfair practices are false claims of limited-time discounts, misrepresentations regarding limited quantities and false claims of discounts or benefits.
CCCS considers it important that e-commerce platforms help raise sellers’ awareness of the Consumer Protection (Fair Trading) Act and advocate the adoption of good practices by sellers. Raising consumers’ awareness of the unfair practices that consumers may experience when transacting on e-commerce platforms will also help consumers better protect themselves. CCCS has developed an infographic containing good trade practices for sellers to promote responsible selling on e-commerce platforms.
Other findings from the market study include the following:
- Consumers check multiple platforms for better offers, and consider both price and non-price factors in deciding which platform to use.
- E-payment services by e-commerce platforms are unlikely to be a prerequisite for a platform’s success in Singapore.
- The lack of data is currently not a critical barrier to entry for e-commerce platforms.
- Data protection is not a key parameter of competition among e-commerce platforms.
The market study is part of CCCS’s on-going efforts to monitor key developments in the digital economy and understand the impact of these developments on competition and consumers in markets within Singapore.
The following materials are available on the CCCS website www.cccs.gov.sg: