Easier for firms to join forces in pandemic

The competition watchdog has slashed red tape for businesses that want to work together to supply essential goods or services - such as coronavirus testing kits - amid the Covid-19 pandemic.

Companies 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 yesterday it will now assume that collaborations that sustain or improve the supply of essential goods or services are likely to generate net economic benefits and not infringe the Competition Act.

It noted that companies may need to temporarily collaborate, owing to the disruption arising from the pandemic, so it will generally not investigate them, provided that other criteria are also met. These include the collaborations being limited in scope and time and not involving price fixing, bid rigging, market sharing or output limitation.

One type of partnership it said would not need evaluation would be if companies agree to share production lines or inputs to increase the output of Covid-19 testing kits or their components.

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

The CCCS will evaluate collaborations that end after July 31 next year to assess if 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 are encouraged to perform their own assessments as to whether their collaboration falls within the new framework. The CCCS can be contacted for further clarifications at cccs_feedback@cccs.gov.sg