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Container Liner Shipping
Businesses Merge
Alleged Bid-rigging in
Electrical Services and Asset
Tagging Tenders
CCS issued the go-ahead to the proposed Joint Venture (“JV”)
between Nippon Yusen Kabushiki Kaisha Ltd., Mitsui O.S.K Lines Ltd.
and Kawasaki Kisen Kaisha Ltd. Under the JV, the companies will
merge their container liner shipping business and their container
terminal services business outside Japan. The provision of container
liner shipping services will be the only overlapping services between the
companies that would affect Singapore.
On 21 March 2017, CCS issued
a Proposed Infringement
Decision (“PID”) against
Chemicrete Enterprises Pte. Ltd.
(“Chemicrete”), Cyclect Electrical
Engineering Pte. Ltd. (“Cyclect
Electrical”), and Cyclect Holdings
Pte. Ltd. (“Cyclect Holdings”)
(together the “Cyclect Group”);
HPH Engineering Pte. Ltd. (“HPH”);
and Peak Top Engineering Pte. Ltd.
(“Peak Top”) for their involvement
in bid-rigging the tender for the
provision of electrical services for
the Formula 1 Singapore Grand Prix
(“F1 Tender”) from 2015 to 2017.
In the case of the Cyclect Group
and HPH, the PID was issued for
engaging in bid-rigging the tender
for the provision of asset tagging
services for GEMS World Academy
(Singapore) (“GEMS Tender”).
F1 TENDER
The investigation revealed that
the price schedules and final bid
prices of the four bids submitted by
Chemicrete, Cyclect Electrical, HPH
and Peak Top were prepared by the
Cyclect Group, with the intention
that Cyclect Electrical would win
the tender.
PROPOSED INFRINGEMENT
DECISION ISSUED
SERVICES
SERVICES
APPROVED
FINDINGS
None of the
companies’ combined
market shares for
each of the relevant
markets crosses CCS’s
indicative thresholds
of a merger situation
that may raise
competition concerns.
A significant number
of customers (freight
forwarders and
beneficial cargo
owners) demonstrate
bargaining power
through their
procurement
processes.
There is limited
product differentiation
by container liner
shipping service
providers generally;
the companies under
this JV are not likely to
be closer competitors
to each other than
against other players
in the relevant
markets.
The JV is unlikely to
increase the possibility
of anti-competitive
coordination, given
the large number of
liners and low market
concentration.
Barriers to entering
the relevant markets
are not prohibitively
high.
Barriers to expansion
are low.
CASE TEAM MEMBERS
Poh Lip Hang, Nicholas Sim, Yeo Hui Chuan, Tan Hi Lin
CASE TEAM MEMBERS
Lynette Chua, Terence Seah, Lee Wan Yi, Toh Shihua,Winnie Ching
GEMS TENDER
The investigation revealed that
Chemicrete had sought HPH’s
assistance to support Chemicrete’s
in winning the tender. To this end,
Chemicrete had forwarded a
competing quote to be submitted
by HPH that was higher than
Chemicrete’s own quote for
the GEMS Tender, which HPH
eventually submitted to GEMS.
The companies had six weeks from
the receipt of the PID to make
their representations to CCS. CCS
will then make its final decision,
after careful consideration of the
representations, and all available
information and evidence.
COMPETITION COMMISSION OF SINGAPORE
26