CCCS Imposes Financial Penalty On Warehouse Operators For Price Fixing Conduct Relating To Warehousing Services

Law FirmRajah & Tann
Subject Matterntitrust/Competition Law, Antitrust, EU Competition
AuthorMs Kala Anandarajah, Tanya Tang, Alvin Tan and Joshua Seet
Published date02 January 2023

Overview

As we reach the end of the year, we thought to leave you with an important case touching on cartel behaviour, the exchange of information, and importantly, the careful consideration of whether and when to plead leniency and with what. We will host a breakfast session early in 2023 on the landscape for cartels with a particular focus on leniency and dawn raids. Watch this space.

On the case itself, on 17 November 2022, the Competition and Consumer Commission of Singapore ("CCCS") issued an Infringement Decision against four warehouse operators for engaging in anti-competitive agreements in violation of section 34 of the Competition Act 2004 ("Act"), and imposed a total financial penalty of close to S$3 million.

Specifically, the four warehouse operators, namely CNL Logistics Solutions Pte. Ltd. ("CNL"), Gilmon Transportation & Warehousing Pte. Ltd. ("Gilmon"), Penanshin (PSA KD) Pte. Ltd. ("Penanshin") and Mac-Nels (KD) Terminal Pte. Ltd. ("Mac-Nels") (collectively the "Parties") were found to have engaged in price fixing conduct by imposing in a coordinated manner an additional charge known as the "FTZ Surcharge" for warehousing services at Keppel Distripark. The FTZ Surcharge is a surcharge imposed on import cargo stored within the Free Trade Zone by warehouse operators.

CCCS' Investigation and Decision

In response to a complaint received from a member of the public, CCCS commenced an investigation on 8 August 2018. On 19 November 2019, CCCS conducted simultaneous inspections without notice (i.e. dawn raids) on 11 warehouse operators, including the Parties, that have warehouses located at Keppel Distripark. CCCS subsequently conducted interviews with, and obtained information and documents from the key personnel of the Parties.

CCCS' investigations revealed that the Parties coordinated the imposition of an identically named FTZ Surcharge at the same price of S$6 per weight/measurement on the same type of goods (i.e. import cargo) via physical meetings, emails, phone calls and WhatsApp conversations which occurred among them on 15 and 16 June 2017. The FTZ Surcharge imposed by CNL, Gilmon and Penanshin was effective from 1 July 2017, and Mac-Nels' FTZ Surcharge was effective from 1 August 2017.

Based on the evidence, CCCS concluded that the Parties had coordinated their pricing strategies instead of determining them independently. Such price fixing conduct had restricted price competition in the market for warehousing services. In particular, the...

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