The Competition and Consumer Commission of Singapore (“CCCS”) has issued the “COVID-19 Guidance Note” to provide businesses with more clarity on collaborations between competitors in relation to the supply of essential goods or services in Singapore.
The disruption arising from the COVID-19 pandemic may require companies to temporarily collaborate to sustain or improve the supply of essential goods or services.
Such collaborations may need to be put in place quickly during this period. Under normal circumstances, such collaborations may require further assessment for net economic benefits.
Given the exceptional nature of the COVID-19 pandemic, for a temporary period, CCCS will assume that collaborations that sustain or improve the supply of essential goods or services1 in Singapore, which are limited in scope and time as set out in the COVID-19 Guidance Note, and which do not involve price-fixing, bid-rigging, market sharing or output limitation, are likely to generate net economic benefits and therefore, are unlikely to infringe the Competition Act (Cap. 50B). CCCS will generally not investigate such collaborations.
An example of a collaboration that can fall under the COVID-19 Guidance Note would be where businesses agree to share production lines or inputs to increase total production of testing kits or its components for the purposes of addressing the COVID-19 pandemic.
The COVID-19 Guidance Note applies to such collaborations put in place from 1 February 2020, and which will expire by 31 July 2021. For collaborations that only end after the COVID-19 Guidance Note expires, CCCS will evaluate them using the criteria applicable under normal circumstances.
Agreements (including collaborations) that satisfy the NEB criteria applicable in normal circumstances are already excluded from section 34 of the Act and consequently, do not need to come under this COVID-19 Guidance Note.
Similarly, agreements entered into with the Singapore Government or any statutory body, or agreements entered into on their behalf, are already excluded under section 33(4) of the Act.
Businesses are encouraged to perform their own assessment first to determine whether their collaboration falls within the framework set out in this COVID-19 Guidance Note. Businesses that wish to undertake collaboration on essential goods or services but have queries about the framework in this COVID-19 Guidance Note may contact CCCS for clarification. The option of notifying CCCS for guidance or a decision on the application of the Act to an agreement remains available.
Businesses are cautioned against taking advantage of the COVID-19 pandemic as a cover to engage in anti-competitive activities that do not generate net economic benefit. CCCS retains the discretion to commence investigations in such cases.