Four hotels fined more than $1.5 million in total for sharing commercially sensitive information

The four hotels are: (clockwise from top left) Capri by Fraser Changi City Singapore, Crowne Plaza Changi Airport Hotel, Village Hotel Katong and Village Hotel Changi.
The four hotels are: (clockwise from top left) Capri by Fraser Changi City Singapore, Crowne Plaza Changi Airport Hotel, Village Hotel Katong and Village Hotel Changi.PHOTOS: F&N, CROWNE PLAZA CHANGI AIRPORT, FACEBOOK/VILLAGE HOTELS & RESIDENCES

SINGAPORE - Four hotels that colluded by sharing with each other the non-public room rates offered to companies have been fined more than $1.5 million in total for infringing the Competition Act.

Singapore's competition watchdog, the Competition and Consumer Commission of Singapore (CCCS), issued an infringement decision against the owners and operators of the four hotels on Wednesday (Jan 30).

The four hotels are: Capri by Fraser Changi City Singapore, Village Hotel Changi, Village Hotel Katong, and Crowne Plaza Changi Airport Hotel.

These hotels are between a five- and 15-minute drive from Changi Airport.

Capri's former owner Ascendas Frasers and operator Frasers Hospitality Pte Ltd (FHPL) were slapped with the largest penalty of $793,925, with the hotel's current owner Frasers Hospitality Trustee and FHPL handed a further fine of $216,526.

The Village Hotels, which are both managed by Far East Hospitality Management, were fined $286,610, while Crowne Plaza received a fine of $225,293.

The information shared across the four hotels included the percentage discount that corporate customers asked for during confidential negotiations, and the responses of the hotels' sales representatives.

The competition commission provided extracts of four WhatsApp conversations between the sales representatives at its media briefing, which it had obtained during its investigation that culminated in a raid on June 30, 2015.



Extracts of WhatsApp conversations between various sales representatives provided by the Competition and Consumer Commission of Singapore, which it had obtained during its investigation that culminated in a raid on June 30, 2015. PHOTO: CCCS



Extracts of WhatsApp conversations between various sales representatives provided by the Competition and Consumer Commission of Singapore, which it had obtained during its investigation that culminated in a raid on June 30, 2015. PHOTO: CCCS

 
 

Sales representatives of Capri and the two Village Hotels exchanged information between July 3, 2014, and June 30, 2015.

The same Capri sales representative also exchanged information with a Crowne Plaza counterpart between Jan 14, 2014, and June 30, 2015.

The competition commission said the two Village Hotels and Crowne Plaza received lighter penalties after applying for leniency treatment.

Under the CCCS' leniency programme, businesses which come forward with information on their cartel services are given reductions on financial penalties of up to 100 per cent.

First applicants who come forward before the competition commission begins investigations may be given total immunity.

Capri did not apply for leniency, CCCS added.

"The exchange of non-public commercially sensitive information between competitors is harmful to competition and customers in the market as it reduces the competitive pressures faced by competitors in determining their commercial decisions, including the price they will offer to customers," said the competition commission's chief executive Toh Han Li.

"If a business receives such information from its competitor, it should immediately and clearly distance itself from such conduct and report it to CCCS."

Mr Toh added that this was the second such case CCCS has handled where competitors shared commercially sensitive information, which is distinct from cases involving price-rigging behaviour.

In the other case, two ferry operators serving the Singapore-Batam route were in July 2012 fined $172,906 and $113,860 respectively for infringing the Competition Act.

Responding to queries from The Straits Times, Far East Hospitality chief executive officer Arthur Kiong said: “Although disappointed with the infringement decision, the Group respects the position taken by CCCS.

“We have and continue to take various steps to review and implement rigorous compliance and training programmes to ensure that our business practices are and continue to be fully compliant with all applicable laws.”

He said these steps include a section on compliance with competition law in employees’ handbook and in orientation sessions for all employees.