Less red tape for businesses that wish to collaborate on supply of essential goods during Covid-19

Essential goods or services include testing kits.
Essential goods or services include testing kits.PHOTO: AFP

SINGAPORE - The competition watchdog has slashed red tape for businesses that want to work together to supply essential goods or services like testing kits amid the pandemic.

Companies that have been keen to join forces often have to undergo assessment by the Competition and Consumer Commission of Singapore (CCCS) to ensure that the partnership generates economic benefits.

But the CCCS said on Monday (July 20) that it will now assume that collaborations that sustain or improve the supply of essential goods or services would likely generate net economic benefits and not infringe the Competition Act.

It noted that companies may need to temporarily collaborate because of the disruption arising from the pandemic, so it will generally not investigate them provided that other criteria are also met.

These include that the collaboration is limited in scope and time and does not involve price-fixing, bid-rigging, market sharing or output limitation.

One type of partnership that it said would not need evaluation would be if firms agreed to share production lines or inputs to increase the output of testing kits or their components.

Businesses have been told of this change, which applies only to such collaborations that were put in place on Feb 1 and which will expire by July 31, 2021.

The CCCS will evaluate collaborations that end after July 31 next year to assess whether they raise concerns.

But the competition watchdog had a warning as well: "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."

 
 
 

It added that businesses should perform their own assessment as to whether their collaboration falls within the new framework. The CCCS can be contacted at cccs_feedback@cccs.gov.sg for further clarifications.