Legal Developments – Archive

Updated 2 December 2019

This site provides some updates on legal developments in Malaysia and around the world that are either of public importance or related to our firm’s PRACTICE AREAS.

Steel Purchasing Cartel – Competition Law and Your Business

The German competition authority on November 21, 2019, imposed financial penalties on BMW, Daimler and Volkswagen for their involvement in a steel purchasing cartel. The steel products that formed the subject matter of the cartel were the long products which were used to produce crankshafts, gearwheels or steering rods.

The cartel activities apparently occurred over 10 years, from 2004 to 2016. The carmakers regularly met with steel manufacturers and other companies in the supply chain to discuss and fix uniform surcharges for the purchase of steel.

While the steel products concerned accounted for less than 1% of a car’s typical final value, the carmakers were fined a total of 100 million euros—BMW 28 million euros, Daimler 23.5 million euros.

The German case marks just the tip of the iceberg of Competition Law. There are various kinds of potentially anti-competitive agreements (whether horizontal, vertical or cartel activities) and abuses of dominant positions. Further, while there is yet no merger control in Malaysia, anti-competitive mergers and acquisitions may possibly be objected to. The most recent mass boycott by the independent car repairers and toll trucks in Penang is another potential Competition Law case for all parties concerned. Another potential competition instance may be the upcoming implementation of 5G technology when there will be issues relating to ownership and access.

For more info on Competition Law Practice, you may wish to visit ETCo’s Competition Law FAQs webpage at Antitrust & Competition Law FAQs.

If your company has any concerns with Competition Law, whether in relation to business partners or competitors or the authority, and would like to know how to deal with them, please do not hesitate to Contact Us.

For more info about ETCo’s Competition Law & Antitrust Practice, please feel free to visit Competition Law and Antitrust.

Source: Reuters

A Costly Dismissal of an Employee – Lessons to Learn from It [1]

An employee of a government-owned company (GOC) began her career with the GOC way back in 1993 when her starting salary was merely RM1,590.00. She joined as Staff Development Executive, though it is unclear from the judgment of the Industrial Court what qualification she then held, nor is it clear if she subsequently obtained any or any additional qualifications. She spent her entire career with the GOC, climbing her career ladder to her last position as a Senior Manager of a “Unit” within a department, drawing a whopping salary of RM25,769.00 a month plus car allowance of RM1,600.00.

Apparently due to internal reorganization, the Unit which she headed was placed under another department headed by a Mrs Z. The working relationship did not turn out well between the two of them. In the yearly appraisal prior to her dismissal, she was appraised as well-below par, which, according to the GOC’s internal policy, necessitated placing her under the so-called Performance Improvement Plan (PIP) for 6 months for performance observation. At the end of the 6-month period, the conclusion reached was that she had not improved in her work performance, and she was therefore dismissed from the GOC upon 24-hour notice. She brought the matter to the Industrial Court.

In handing down the judgment, the Industrial Court found that her dismissal was wrongful and unlawful. The court went on to order the GOC to compensate her 1 month of her last-drawn salary for every completed year of service, and, in addition, backwages based on her last-drawn salary for every month she was unemployed post-dismissal. In total, the court awarded her 24 months of compensation in lieu of reinstatement, and 10 months of backwages, totaling a whopping sum of more than RM1 million – RM1,133,836.00 to be exact.

The facts of the case aside, there are a few significant lessons to take away from this case.

One is the clear and unchallenged recognition by the Industrial Court (as well as the appellate courts like the Federal Court) that industrial jurisprudence is in favour of the employees.

Secondly, there were 6 witnesses testifying for the GOC while the employee was alone; yet, she won her case. In other words, having more witnesses does not guarantee a win for the employer.

Thirdly, and perhaps most significantly, while an employee is allowed by law to be unrepresented or, subject to permission of the Industrial Court, represented by Counsel, a company may engage an external Counsel or be represented by its employee (such as HR manager or in-house Counsel, if the company has a legal department). The GOC was represented by its General Counsel and lost the case. What is the significance of engaging an external Counsel? There are a few reasons to justify engaging an external Counsel. First, the perceived independence. An external Counsel owes a duty to the court to assist with proper dispensation of justice. Such external Counsel is not an employee of the company, and, hence, retains his or her independence when advising the client or conducting the case. Such independence is valued by the court. Second, in-house Counsel deal mainly with the internal legal requirements of a company which are mainly about reviewing contracts, negotiating with third parties, or providing advice. Conducting litigation is rarely within the day-to-day scope of work of in-house Counsel. As such, in-house Counsel tends to lack the experience or skills of preparing a case or cross-examining the opponent’s witnesses. Third, whether for contentious or non-contentious legal matters it is always advisable to obtain a second opinion from an external Counsel, if the importance of the matter warrants it. The external Counsel will be able to give a more objective and independent view and assessment of the matter.

If your company has any employment issue, or would like to know how a company may protect itself from the employee-friendly industrial jurisprudence, please do not hesitate to Contact Us.

For ETCo’s practice areas, you may wish to visit Practice Areas.

[1] This case write-up is summarized from the case of Norain Redzkiah v. Petronas.

Amendments to Industrial Relations Act 1967

The Lower House of Parliament passed the Industrial Relations (Amendment) Act 2019 (“Amending Act”). There are a few notable amendments to the 1967 Act (“Principal Act”).

One significant observation is the removal of the reference by the Director General of Industrial Relations (“DGIR”) of complaints and disputes essentially between the employers, on the one hand, and the employees or their trade union, on the other hand, to the Minister and the consequential Ministerial discretion whether to refer the same to the Industrial Court. One significant development arising from that is the amendment to make it an automatic reference (i.e. no more discretion) by the DGIR (as opposed to the Minister) of a representation on dismissal to the Industrial Court. A related observation is the substitution for the Ministerial decision-making the decision of the DGIR, such as in determining whether a trade union represents the workmen.

The Amending Act also adds new provisions on the so-called Sole Bargaining Rights to Part III of the Principal Act. The new provisions appear to be intended to deal with, among others, situations where there is doubt as to whether a trade union receives the support of the workmen whom it claims to represent, or where more than one trade union claims to represent the workmen.

In respect of representation of the employer or workman at the conciliation stage, the Amending Act provides for any person, other than an advocate and solicitor, duly authorized in writing to represent the employer or workman, subject to the permission of the DGIR. As for a workman with mental disability and without a guardian ad litem, the Amending Act provides for a next-of-kin of the workman to apply to the High Court for an order to appoint a guardian ad litem for the workman concerned.

The Amending Act also provides for the proceedings at the Industrial Court to continue notwithstanding the death of the workman concerned. Further, an award in favour of a deceased workman may be made include backwages or compensation or both instead of reinstatement in favour of the next-of-kin of the deceased workman.

In addition, an award of the Industrial shall carry interest at such rate till full settlement.

Replacing the old regime of making a reference to the High Court on a question of law, and the finality of the Industrial Court’s award, the Amending Act provides for appeal against an award to the High Court.

The Amending Act also replaces the existing First Schedule on Essential Services with a new schedule.

Lastly, the Amending Act provides that the amended provisions may come into force on different dates as the Minister may determine.

If your company has any queries or would like to know how the amendments to the Industrial Relations Act 1967 may affect the employment situation in your company, please do not hesitate to Contact Us.

Resale Price Maintenance – Coca-Cola Is Off The Hook!

The Malaysia Competition Commission (MyCC) appears to have taken a more active role in enforcement lately. In addition to the proposed penalty of RM86.77 million Grab for abusing its dominant position, the MyCC also investigated Coca-Cola Malaysia for alleged resale price maintenance in relation to its Coca-Cola beverages. Although the investigation ended in a finding of non-infringement, much to the relief of Coca-Cola Malaysia, the investigation appears to be the first reported investigation following a Ministerial directive under the Competition Act 2010. The investigation also sheds some light on the approach taken by the MyCC in relation to resale price maintenance and recommended retail price. The Coca-Cola case together with the Grab case is likely to compel businesses to rethink their business methods, particularly in the distributive trade.

Do you practise resale price maintenance? Do you practise recommended retail price? Are they the same? What’s the difference between them? What are the legal consequences under Competition Law? For more information about our firm’s Competition Law & Antitrust Practice, please visit Competition Law and Antitrust.

Income Tax (Capital Allowance) (Development Cost for Customised Computer Software) Rules 2019

The Income Tax (Capital Allowance) (Development Cost for Customised Computer Software) Rules 2019 have been gazetted. The Rules will take effect from the year of assessment 2018. The Rules provide for tax allowances in the forms of initial allowance and annual allowance for the development cost of customized computer software. There are, however, some exceptions to the claim for tax allowances.

For more information of our firm’s Tax and Customs Practice, please visit Tax, SST and Customs.

Service Tax (Digital Service) Regulations 2019

The Service Tax (Digital Service) Regulations 2019 has been gazetted. The Regulations apply to any foreign service provider who provides any digital service to consumer. Such foreign service provider whose total value of digital services exceed RM500,000.00 is required to register with the Inland Revenue Board (LHDN). The duty to register came into effect on 1 October 2019.

The Regulations also prescribe the contents of invoices to use. The use of such invoices come into effect on 1 January 2020.

For more information of our firm’s Tax and Customs Practice, please visit Tax, SST and Customs.

Service Tax (Rate of Digital Services Tax) Order 2019

The Service Tax (Rate of Digital Services Tax) Order 2019 has been gazetted. It will come into effect on 1 January 2020. Under the Order, service tax at the rate of 6% of value of digital services charged by a foreign service provider will be charged and levied.

For more information of our firm’s Tax and Customs Practice, please visit Tax, SST and Customs.

Guidelines on Mergers & Acquisitions and Guidelines on Authorisation of Conduct in the Communications and Multimedia Industry

The Malaysian Communications and Multimedia Commission (MCMC) released two new guidelines on 17 May 2019. The guidelines seem to coincide with the announced plan to merge Celcom and DIGI, two key players in the industry.

For more information about our firm’s Competition Law and Antitrust Practice, please go to Competition Law & Antitrust.

Passing Written Resolutions under the Companies Act 2016 – Voting Rights Count!

In the case of MOHAMED ZAHID YON BIN MOHAMED FUAD v. JASON JONATHAN LO and ors, there was a dispute between the only two shareholders of a company. The plaintiff shareholder carried 40% shares while the other shareholder 60% shares (“Majority Shareholder”). As a result of some disputes between the shareholders, the Majority Shareholder signed a written resolution to appoint a person as a new director but it was objected to by the other shareholder. In interpreting s 291(1) and 293(1) of the Companies Act 2016 together, the High Court held that the simple majority required to pass a members’ written resolution depends on the shareholding, and not the number of members. This is so notwithstanding the express words in s 291(1) which provides “a simple majority of more than half of such members”. In other words, the High Court declined to interpret s 291(1) literally. Another ruling of the High Court is that with the passing of the Companies Act 2016, the previous Companies Act 1965 together with the (inconsistent) provisions therein are repealed and do not apply. The second ruling came as a result of the plaintiff’s attempt to rely on s 152A(1) of the repealed Companies Act 1965 which would require a written resolution to be signed by all shareholders entitled to vote.

For more information about our firm’s Corporate & Commercial Law Practice, please go to CORPORATE & COMMERCIAL LAW. You may also wish to visit Corporate & Company Law FAQ’s.

Anti-Dumping Investigation of Cold-Rolled Coils Imported from Four Countries

The Government of Malaysia announced the initiation of an anti-dumping (AD) investigation of cold-rolled coils on 29 March 2019. The investigation relates to such coils of iron or non-alloy steel of width more than 1,300mm originating in or imported from four countries, namely, the People’s Republic of China, Japan, Republic of Korea, and the Socialist Republic of Vietnam.

The Petitioner, Mycron Steel CRC Sdn Bhd, a Malaysian steel manufacturer, alleges in its petition that the imports concerned have been dumped in Malaysia as seen in the increase in terms of absolute quantity, and as such have caused material injuries to the Petitioner.

For more information about our firm’s Trade Remedies and WTO Law Practice, please go to Trade Remedies  and WTO Law .

AD Duties Imposed on Exporters of Galvanized Iron & Steels Products from China and Vietnam

On 8 March 2019, the Government of Malaysia completed its investigation of alleged dumping of certain galvanized iron and steel products on the Malaysian market by producers in China and Vietnam. The AD duties imposed range from -5.11% to 16.13%. The imposition of the AD duties came after the government received a petition from the local producers on 25 August 2018, and completed its initial investigation on 8 November 2018 and imposed provisional AD duties.

For more information about our firm’s Trade Remedies and WTO Law Practice, please go to Trade Remedies & World Trade Law.

The First Bid-Rigging Case under Competition Law

In its media release dated 4 March 2019, the Malaysia Competition Commission (MyCC) issued a Proposed Decision (PD) against 8 enterprises for alleged bid-rigging in relation to tenders valued at RM1.92 million submitted to Akademi Seni Budaya dan Warisan Kebangsaan (ASWARA).

Upon investigation, the MyCC found that the 8 enterprises had apparently colluded with one another by sharing among them their Request for Quotation (RFQ) and tender proposal information, manipulating prices and preparing documents for one another.

The PD marks a significant milestone in the enforcement history of the MyCC since its inception in 2011. The PD is the first reported case directly on bid-rigging. It is also the first reported construction-related case. The PD is another piece of evidence of the new Government’s concern about high living costs, particularly costs attributable to housing and construction. Such concern may be seen as an extension of the market study into the costs of construction materials conducted by the MyCC a few months ago.

Market players in the construction and construction-related sectors (whether supplying goods or services) may wish to take this opportunity to increase Competition Law compliance awareness in their organization and implement a Competition Law Compliance Programme to reduce the risk of paying financial penalties and damage to their commercial reputation.

For more information about our firm’s Competition Law and Antitrust Practice, please go to Competition Law & Antitrust.

PHP6.5 Million Penalty on Grab for Failing to Submit the Correct Data

This is the fourth in the sequel of our report on Grab-Uber merger in Southeast Asia. Having imposed a penalty of PHP16 million on Grab last October for violating the interim measures The Philippine Competition Commission (PCC) had imposed while reviewing the merger, the PCC imposed another sum of PHP6.5 million on Grab on 25 January 2019 for violating its voluntary commitments which Grab submitted to the PCC to secure the latter’s approval of its acquisition of Uber last year.

The penalty was imposed on Grab Philippines for submitting deficient, inconsistent and incorrect data for the monitoring of its compliance with its voluntary commitments.

For more information about our firm’s Competition Law and Antitrust Practice, please go to Competition Law & Antitrust.

Legal Professional Privilege – How Far Does It Protect You As A Client?

The recent raid by the Royal Malaysian Police (PDRM) on the office of a Malaysian law firm representing Goldman Sachs in the 1MDB scandal, again, brought up the issue of Legal Professional Privilege that a client and his lawyer enjoy when the former seeks legal advice from the latter. The ambit of the Legal Professional Privilege is, however, never clear. There is a difference between claiming the privilege in a criminal case and in a civil matter. There is also a fine, yet significant line, between client-solicitor relationship in a prior civil matter and client-counsel relationship in a subsequent criminal case. The different approaches taken by the two law firms—one voluntarily providing documents requested by the PDRM and the other insisting on a court order—speak for the muddy water in this area of law. Dr. Vince of our firm had an article on this topic published in the Malayan Law Journal way back in the year 2002.

For more information about our firm’s Litigation, Administrative Investigation & Court Practice, please go to Litigation, Administrative Investigations, and Other Court Matters.

How Far Can Your Company Exclude Its Liability?

In its decision in December 2018, the Federal Court (the highest court in Malaysia) made a ruling concerning an exclusion/exemption clause in a case where some borrowers sued the bank.

In Anthony Lawrence Bourke and another v CIMB Bank Bhd (2018) the couple borrowers, who were British, brought a property in Malaysia. For the purchase of the property, they applied to CIMB Bank and were granted a term loan facility of RM715,487.00. For that purpose, they entered into a Loan Agreement dated 22 April 2008 with the bank. The property was then under construction and the bank was obliged under the Loan Agreement to make progressive payments directly to the developer against the certificates of completion issued by the architect from time to time. On or about 12 March 2014 the developer sent an invoice No. IV3408 enclosing an architect’s certificate dated 28 February 2014 to the bank and demanding payment of RM25,557.12. The bank received the notice on 13 March 2014 and payment was due on the 25th of the same month (“Due Date”). The disbursement department of the bank sent a notice to the relevant branch on 20 March 2014 requesting a site visit prior to making payment. The bank failed to conduct any site visit 3 months after the Due Date. About a year later, the sum remained unpaid and by a notice of termination dated 10 April 2015 sent to the borrowers/purchasers, the developer terminated the Sale and Purchase Agreement (“SPA”).

The borrowers thereupon filed a claim against the bank seeking damages for losses suffered as a result of the termination of the SPA. The bank relied, inter alia, on clause 12 of the Loan Agreement which, according to the bank, absolved any claim or liability against it. Clause 12 provided that:

“Notwithstanding anything to the contrary, in no event will the measure of damages payable by the Bank to the Borrower for any loss or damage incurred by the Borrower include, nor will the Bank be liable for, any amounts for loss of income or profit or savings, or any indirect, incidental consequential exemplary punitive or special
damages of the Borrower, even if the Bank had been advised of the possibility of such loss or damages in advance, and all such loss and damages are expressly disclaimed.”

The case went through three stages from the High Court which ruled in favour of the bank on the basis of clause 12, to the Court of Appeal which overturned the High Court’s decision and found in favour of the borrowers, to ultimately the Federal Court which affirmed the Court of Appeal decision. Both the Court of Appeal and Federal Court held that clause 12 of the loan agreement came within the ambit of section 29 of the Contracts Act 1956 and the courts struck down clause 12 for violating the said section.

While the ruling was made in a banking case, the principle established by the Federal Court is potentially capable of extensive application to any other situation and any other industry where the parties to a contract are not of equal bargaining position (highly emphasized by both the Court of Appeal and Federal Court), and the party with an upper hand imposes its terms of contract and the other party has to accept them with no alternative options, which is very common in the commercial context in Malaysia given that there is no Act of Parliament that governs the so-called unfair contractual terms, unlike the UK, for instance.

As such, companies which impose their terms of contract in the course of their business, particularly but not necessarily in their standard contracts, may wish to seek legal consultancy and obtain advice accordingly.

For more information about our firm’s Corporate & Commercial Law Practice, please go to CORPORATE & COMMERCIAL LAW.

ACCC Takes Actions against Trivago over Hotel Price Advertisements

The Australian Competition & Consumer Commission has taken legal actions against Trivago, a European company, for allegedly making false and misleading hotel pricing representations in its TV advertisements and on its website to the consumers.

The allegations concern TV advertisements and website display since December 2013. ACCC’s case is that while Trivago apparently aggregated deals offered by online travel sites (such as Expedia,, Amoma and others) for available rooms at a hotel and highlighted one price out of the advertisers, giving the impression that it was the best deal, and that Trivago presented itself as an impartial and objective price comparison service that would help consumers identify the cheapest hotel rooms when, in fact, Trivago, prioritised advertisers who paid the highest cost per click fee to Trivago.

Trivago was also alleged to have often compared an offer for a standard room with an offer for a luxury room at the same hotel, giving the false impression of savings.

The case highlights growing concerns among pro-active enforcers about online comparison platforms and how algorithms may be manipulated to present misleading results to consumers.

Source: ACCC media release dated 23 Agust 2018

CCCS’s Final Decision on Grab-Uber Merger

In its decision released on 24 September 2018, the Competition and Consumer Commission of Singapore (CCCS) largely affirmed its Proposed Infringement Decision released earlier. The CCCS, in addition, imposed some directions that are rather interesting and yet significant that are expected to maintain the competitiveness of the relevant market as market conditions continue to develop.

For more information about our firm’s Competition Law and Antitrust Practice, please go to Competition Law & Antitrust.

CCCS Guidance Note for Airline Alliance Agreements

The Competition and Consumer Commission of Singapore (CCCS) released its Guidance Note for Airline Alliance Agreements on 5 September 2018.

The Guidance Note comprises two main sections: one section on the procedural issues, and the other section on the substantive issues, when assessing airline alliances. The Guidance Note is intended to provide guidance to airlines that wish to enter into an alliance that may pose a competitive effect on the Singapore air transport market. The Guidance Note is significant to Singapore in its attempt to sustain its position as the aviation hub in the Southeast Asia region.

The procedural section introduces a streamlined process for expedited assessment of airline alliance agreements based on certain factors, as well as related information on submission of notification, availability of pre-notification discussions, state-of-play meetings, and offer of commitments.

The substantive section provides some bases or methods of economic analysis which the CCCS will likely take into account in its assessment, for the market players as well as their legal advisers to gauge.

The Guidance Note basically recognizes the market reality that many of the airline alliances are on a lasting basis, particularly where there is revenue- or profit-sharing or even the MNJVs. As such, they are akin to mergers and should be treated and assessed in a manner different from the typical assessment of a potentially anti-competitive agreement. On the substantive part, while the Guidance Note does provide some criteria for assessment, there are many more industry-specific issues or characteristics that may have to be taken into account and we shall wait to see them. Further, it is unclear from the Guidance Note whether it is intended to cover air transport (passenger, cargo or both) only, or it extends to engineering and maintenance, and ground-handling, though the first seems to be the intended one. On the other hand, while the analysis is geared towards the airline industry, many of the methods of analysis are equally applicable to other markets.

For more information about our firm’s Aviation Law Practice, please visit Aviation Law Practice.

Publication of the Regulation (EU) 2018/1139 of the European Parliament and of the Council of 4 July 2018

The Regulation (EU) 2018/1139 (“Regulation”) was published in the Official Journal of the European Union (“EU”) on 22 August 2018. The title of the Regulation is the Regulation on common rules in the field of civil aviation and establishing a European Union Aviation Safety Agency (“EUAFA”), and amending Regulations (EC) No 2111/2005, (EC) No 1008/2008, (EU) No 996/2010, (EU) No 376/2014 and Directives 2014/30/EU and 2014/53/EU of the European Parliament and of the Council, and repealing Regulations (EC) No 552/2004 and (EC) No 216/2008 of the European Parliament and of the Council and Council Regulation (EEC) No 3922/91.

The Regulation appears to be a recast and expansion of the Regulation (EC) No 216/2008 of the European Parliament and of the Council of 20 February 2008, as amended and consolidated.[1] The Regulation expanded on the Regulation (EC) No 216/2008 by increasing the number of articles by more than double from 70 to 141. It is to some extent a recast of the Regulation (EC) No 216/2008 as most of the substantive provisions in the Regulation (EC) No 216/2008 are found in the Regulation, particularly the substantive requirements and the provisions on the European Aviation Safety Agency.

In terms of safety, the Regulation provides for the European Aviation Safety Programme as well as the State Safety Programme.

The substantive requirements are now grouped into eight Sections in Chapter III, namely:

Section I          Airworthiness and environmental protection

Section II         Aircrew

Section III       Air operations

Section IV       Aerodromes

Section V        ATM/ANS

Section VI       Air traffic controllers

Section VII      Unmanned aircraft

Section VIII     Aircraft used by a third-country operator into, within or out of the European Union

The powers of the EUAFA to issue certification for third-country aircraft operators, to conduct investigations and impose fines and periodic payments were retained.

With the publication of the Regulation, the Regulation (EC) No 216/2008 is repealed. Notwithstanding the repeal of the Regulation (EC) No 216/2008, the Regulation in its transitional provisions provides that certificates and specific airworthiness specifications issued or recognised and the declarations made or recognised in accordance with Regulation (EC) No 216/2008 and its implementing rules shall continue to be valid and shall be deemed to have been issued, made and recognised pursuant to the corresponding provisions of the Regulation.

The Regulation shall enter into force on the twentieth day after its publication in the Official Journal, and apply and be binding in its entirety and directly applicable in all the EU Member States.

[1] The full title of the Regulation (EC) No 216/2008 is REGULATION (EC) No 216/2008 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 February 2008 on common rules in the field of civil aviation and establishing a European Aviation Safety Agency, and repealing Council Directive 91/670/EEC, Regulation (EC) No 1592/2002 and Directive 2004/36/EC.

The Philippine Competition Commission Approves Grab-UBER Deal

The Philippine Competition Commission (PCC) approved the Grab-UBER deal on 10 August 2018, subject to certain voluntary commitments submitted by the merging parties and certain conditions.

The overall effects of the commitments and conditions are expected to keep the online hail-and-ride service competitive with fares under manageable control.

The decision of the PCC stands in contrast to the proposed infringement decision by the Competition and Consumer Commission of Singapore (CCCS) released about a month earlier.

For more information about our firm’s Competition Law and Antitrust Practice, please go to Competition Law & Antitrust.

Exchange of Commercially Sensitive Information between Hotels

The Competition and Consumer Commission of Singapore (CCCS) on 2 August 2018 issued a Proposed Infringement Decision (PID) against a number of hotels located in the vicinity of Changi for exchanging commercially sensitive information between them.

The decision came about after the CCCS’ own detection efforts prompted it to commence investigations. The CCCS has yet to determine the financial penalties to be imposed.

For more information about our firm’s Competition Law and Antitrust Practice, please go to Competition Law & Antitrust.

Grab/Uber Merger in Singapore[1]

The Singapore Competition watchdog, the Competition and Consumer Commission of Singapore (CCCS) released its Proposed Infringement Decision (PID) against Grab and Uber on 5 July 2018. The PID was made in relation to the sale of Uber’s Southeast Asian business to Grab in consideration of Uber holding 27.5% stake in Grab (“Transaction”). The CCCS has provisionally found that the Transaction has caused an SLC (i.e. substantial lessening of competition) in the market of chauffeured point-to-point transport (CPPT) platform services in Singapore.

Chronologically, the CCCS sent a letter to the merging parties on 9 March 2018 to explain the country’s merger regime and the CCCS’s investigation powers. On 26 March 2018 the parties announced and completed the Transaction and began to transfer the acquired assets immediately. On 27 March 2018, the CCCS commenced its investigation which constituted a merger under the Singapore Competition Act 2004. On 13 April 2018 the CCCS issued Interim Measures Directions to maintain market competitiveness pending its investigation.

The CCCS has concluded its investigation and found that the merged entity is likely to be able to increase prices and has in fact done so since the completion of the Transaction. The CCCS further found that there are no efficiencies that will outweigh the anti-competitiveness of the Transaction.

As a result, by its PID the CCCS has proposed a number of remedies, mainly aiming at removing exclusivity on the market and increasing market contestability. In addition, the CCCS has proposed to imposed unspecified financial penalties on the parties apparently for executing and completing the Transaction without either having notified the CCCS for clearance or sought the CCCS’s confidential advice prior to the completion of the Transaction.[2]

[1] For more details, see the CCCS’s Media Release dated 5 July 2018

[2] See the CCCS’s Media Release dated 30 March 2018

For more information about our firm’s Competition Law and Antitrust Practice, please go to Competition Law & Antitrust.