31 January 2018

On 5 January 2018, the Competition Commission of Singapore (“CCS”) issued an Infringement Decision against five capacitor manufacturers (“Parties”) for engaging in anti-competitive agreements involving price-fixing and the exchange of confidential sales, distribution and pricing information for certain electrical components (aluminium electrolytic capacitors) used in electrical devices such as computers and a variety of domestic appliances in relation to customers in Singapore.

CCS imposed a total fine of over S$19 million which is the highest financial penalty to date for international cartel matters. In levying the highest financial penalty to date, CCS took into account, among others, the fact that the Parties held more than two-thirds of the share of the market for the sale of AECs in Singapore and the long duration of the cartel conduct.

CCS had exchanges with and cooperated with the competition authorities of the United States, European Union, Japan and Taiwan during the period of investigation. In particular, CCS shared its experience on gathering evidence from the Parties, the progress of CCS’ assessment of the same and discussed various procedural issues relating to the investigation with these agencies.

The Chief Executive of CCS, Toh Han Li, emphasised that CCS will take strong enforcement action to ensure that cartels do not negatively impact Singapore markets and its competitiveness, as Singapore, being an open market, can be impacted by such cross-border cartels.

CCS commenced investigations in May 2014 after receiving an application for immunity under CCS’ leniency programme in October 2013. One of the Parties received total immunity from financial penalties for being the first to apply for immunity under CCS’ leniency programme. Another three Parties had their penalties reduced through use of CCS’ leniency programme.

Daren Shiau, Co-Head of the Allen & Gledhill Competition & Antitrust practice, notes: “The infringement decision is the third issued in respect of global cartel conduct, and more is expected to come. This is a reminder to business entities to be alert to the leniency framework in Singapore, and the manner in which it can be used to manage compliance risks.”

Consistent and regular pattern of communication and information exchange

CCS’ investigations revealed a consistent and regular pattern of communication and information exchange between the Parties, who had regular meetings and/or discussions in Singapore from at least 1997 until March 2013. Senior level employees of the Parties attended meetings in Singapore regularly, almost on a monthly basis, where they (i) exchanged confidential and commercially sensitive business information such as customer quotations, sales volumes, production capacities, business plans and pricing strategies; (ii) discussed and agreed on sales prices, including various price increases; and (iii) agreed to collectively reject customers’ requests for reduction in prices of AECs sold to them. Apart from regular organised meetings, pricing agreements were also reached through ad hoc meetings, bilateral correspondence, and telephone conversations.

Reference materials

The following materials are available on the CCS website www.ccs.gov.sg:

 

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