A monopoly is a market containing a single firm that has or is close to total control of the sector. Monopolies are typically forced to divest assets to satisfy anti-monopoly laws. These antitrust laws were put in place to protect consumers and control companies from evil practices thanks to total control.
Anti–competitive practices are business, government or religious practices that prevent or reduce competition in a market (see restraint of trade).
Singapore legal act:
In this section, you will get an overview of the different types of anti-competitive behaviour.
Strong and vibrant economies have competitive markets at their core. In a competitive market, new ideas are constantly generated and new businesses set up, challenging the position of incumbents. As a result, businesses are spurred to be more efficient, innovative, productive and responsive, thereby becoming stronger over time.
Competition leads to a greater variety of goods and services and brings benefits to consumers. More importantly, it ensures that Singapore has a dynamic business community able to respond to the needs of a changing world. Activities that impede or restrict effective competition ultimately hurt consumers, businesses and Singapore’s long term interest.
The Competition Act establishes a generic law to protect consumers and businesses from anti-competitive practices of undertakings.
The Act covers three main types of anti-competitive behaviour. These are:
- Agreements, decisions and practices that prevent, restrict or distort competition (“the Section 34 prohibition”)
- Abuse of a dominant position (“the Section 47 prohibition”)
- Mergers that substantially lessen competition (“the Section 54 prohibition”)
Enacted in 2004, the Competition Act (“the Act”) provides a generic law to protect consumers and businesses from anti-competitive practices of private entities. It also sets out the various powers and processes in the administering and enforcement of the Act.
The Competition Act comprises six parts:
- Part 1: Introduction of the Act and Definition of Terms
- Part 2: Establishment of the Competition Commission of Singapore (“CCS”) and its functions
- Part 3: Provisions for a competition regime, key prohibitions, block exemption orders, procedures for notification for guidance and decision, and CCS’ powers of enforcement.
- Part 4: Establishment of the Competition Appeal Board (“CAB”) and appeal proceedings before the CAB and the Courts
- Part 5: Establishment of non-compliance with CCS’ request for information and investigatory power as criminal offences and composition of offences
- Part 6: Miscellaneous provisions, including the rights of private action
The three activities prohibited under the Competition Act are:
- Agreements, decisions and practices which prevent, restrict or distort competition (“the section 34 prohibition”)
- Abuse of a dominant position (“the section 47 prohibition”)
- Mergers that substantially lessen competition (“the section 54 prohibition”)
Other than the matters or mergers excluded as specified in the Third and Fourth Schedules, the Competition Act will apply to all private sector undertakings that are capable of carrying out commercial and economic activities, and it will apply regardless of whether the undertaking is owned by a foreign entity or is owned by the Government or a statutory body. The Minister may also, at the recommendation of CCS, make an order exempting a particular category of agreements from the section 34 prohibition. However, as the intent of competition law is to regulate the conduct of market players, it will not apply to the Government, statutory bodies or any person acting on their behalf.
In carrying out its duties to administer and enforce the Act to keep markets competitive, CCS is mindful that any regulatory intervention in the market may impose costs. It seeks to balance these costs against the benefits from effective competition. Therefore, instead of attempting to catch all forms of anti-competitive activities, CCS’ principal focus will be on those activities that have an appreciable adverse effect on competition in Singapore or do not yield net economic benefit. In doing so, CCS gives due consideration to whether the activity promotes innovation, productivity or longer-term economic efficiency so that innovation and enterprise are not constrained inadvertently.
Two rounds of public consultations on the Competition Bill were conducted by the Ministry of Trade and Industry (MTI) in 2004 prior to the finalisation of the Act. Another public consultation exercise on the proposed Merger Regime was held in 2006.
Click here to access the Competition Act (Chapter 50B) via the Singapore Statutes Online.
Click here for more information on CCS competition philosophy.
Click here for more information on the Act’s major provisions.
Click here for information on public consultations related to the competition law regime.