E-commerce sector and its challenges

Singapore's competition law and assessment frameworks are "well suited" to meet issues related to e-commerce, according to a study out yesterday.

It also found that the growing industry will more or less police itself, given its dynamic nature.

"In rapidly changing markets, any market power gained may be temporary and interventions by competition authorities may risk stifling long-term innovation and investment," said the study.

"Interventions should be targeted and made on a case-by-case basis, balancing potential competition concerns with efficiency benefits and the risk of creating market distortions."

The study by economic consultancy firm DotEcon was commissioned by the Competition Commission of Singapore (CCS) to better understand the fast-growing e-commerce industry and related competition issues.

CCS chief executive Toh Han Li said it aims to maintain a level playing field for e-commerce. After all, such an environment is vital to facilitate businesses in their expansion plans here and overseas, he said, noting that anti-competition practices may "stifle innovation and the entry and expansion of new businesses".

Mr Toh was speaking at the CCS e-commerce seminar at the URA Centre. It drew more than 150 participants from various business sectors.

Citing the taxi industry, he said CCS had received feedback that a third-party taxi booking app was abusing its dominant position by offering loyalty discounts to taxi drivers on condition they do not use other third-party apps. "While it is premature to conclude that the third-party app behind the conduct was dominant or that it had abused its dominant positions, CCS will be monitoring market developments closely to safeguard the healthy growth of the market," he said.

"We will also learn from the experience of other countries in how they deal with the opportunities and challenges presented by e-commerce."

Singapore's online retail market is expected to hit $4.4 billion this year - four times the level of 2010. But there is room for growth, said CCS, noting that online sales make up only 4-5 per cent of total retail sales here compared with the 6.5 to 13 per cent in more mature e-commerce markets such as China, Britain and the US.

CCS will embark on a study with the Infocomm Development Authority of Singapore to examine the impact of e-commerce on the postal and logistics market.

A version of this article appeared in the print edition of The Straits Times on December 03, 2015, with the headline 'Law framework 'well suited for e-commerce''. Print Edition | Subscribe