Singapore firms get permission to collaborate

22 July 2020

Singapore’s competition watchdog has told businesses supplying essential goods or services to combat the coronavirus pandemic they will not fall foul of the law if they collaborate with competitors.

The Competition and Consumer Commission of Singapore (CCCS) issued a guidance note to provide clarity on collaborations between competitors to maintain key supplies.

“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,” said CCCS.

It said that “given the exceptional nature of the Covid-19 pandemic” it would not investigate firms that collaborated to improve the supply of essential goods or services in Singapore for a temporary period.

This was provided those collaborations are limited in scope and time and do not involve price-fixing, bid-rigging, market sharing or output limitation, it said.

“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,” it added.

The exemption applies to collaborations dating back to 1 February 2020 and up to 31 July 2021.

“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,” CCCS said.

CCCS also warned companies against taking advantage of the pandemic as a cover “to engage in anti-competitive activities that do not generate net economic benefit”.

Meanwhile the country’s economy is still in a “dire” situation due to the pandemic, according to Ravi Menon, managing director of the Monetary Authority of Singapore.

Menon said unemployment and corporate bankruptcies were likely to increase in the coming months.

Singapore’s economy shrunk by 41.2% in the second quarter compared with the previous quarter, according to advance estimates from the Ministry of Trade and Industry.

Official forecasts for the economy to contract between 4% and 7% this year would mark the most severe downturn since the country’s 1965 declaration of independence.

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