Results of the CCCS-ESS Essay Competition 2018

1^st Prize

Wang Yi Kat (Clifford Chance)

Nexus between Competition and Consumer Protection Policies

The wisdom of housing competition and consumer protection policies in a single agency finds its root in the recognitions that these policies have a common, overarching goal for enhancing consumer welfare and that when applied properly, they reinforce one another. To help shed light on how an agency may take advantage of its combined role to make markets work well for both businesses and consumers, this article will first discuss the opportunities and benefits offered by housing two functions in a single agency. Experiences in other jurisdictions demonstrate that dual-function agencies are capable of approaching competition and consumer protection issues in a unified manner. For instance, where unfair commercial practices misleading or deceiving consumers are used as tools to hinder competition, convergence of enforcement efforts offers the most effective and appropriate solution. In conducting market studies and advocating the policies, a single agency again has the strength of carrying out both competition and consumer protection functions in a comprehensive and balanced manner.

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2^nd Prize

Chua Jun Yan (Yale University)

Killing Two Birds with One Stone: An Integrated Approach to Consumer Protection and Competition Policy

This paper proposes the establishment of a single government agency to oversee competition and consumer protection policies in Singapore. The paper begins with an overview of the trade-offs and synergies between competition and consumer protection policy. Despite the existence of potential trade-offs, a whole-of-government approach would better facilitate the adjudication of conflicting policy objectives. Furthermore, a single government agency would yield economies of scope, enabling more effective implementation of competition and consumer protection policy. This regulatory agility is vital in an increasingly complex market environment dominated by online commerce and cross-border transactions. Finally, this paper contemplates the drawbacks of such an integration, which may lead to excessive administrative discretion, heighten the risk of regulatory capture, and “crowd out” grounds-up advocacy from non-governmental groups like the Consumer Association of Singapore (CASE).

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3^rd Prize

Koh Boon Tiong (Singapore Management University)

Nexus between Competition and Consumer Protection Policies

This paper proposes a framework for harmonising competition and consumer protection policies that go beyond a balancing test between the Competition Act and the Consumer Protection (Fair Trading) Act. Part I posits that Parliamentary intention behind the enactment of the Competition Act can be interpreted to allow for an incremental drift towards a consumer protection outcome. Part II analyses the nature of alignments and misalignments in outcomes driven by competition vs consumer protection laws, and highlights the sub-optimal public welfare outcomes that can arise under some circumstances. Part III details the proposed framework to harmonise competition and consumer protection polices to optimize public welfare. Part IV concludes that, if a binary balancing test outcome is inevitable as a last resort, the bias should drift incrementally towards consumer protection over time.

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Merit

Kala Anandarajah & Tang Zi Quan, Tanya (Rajah & Tann Singapore LLP)

Harmonising Competition and Consumer Protection: Two Roles One Agency

Competition law and consumer protection law share a common goal of enhancing consumer welfare and removing market distortions. The two work in a complementary manner - competition law addresses market distortions from the supply side while consumer protection law targets market distortions from the demand side. While the Competition and Consumer Commission of Singapore (“CCCS”) has taken on an additional consumer protection role from 1 April 2018 onwards, this regulatory agency is not in fact new to the table on this front – in its former iteration as the Competition Commission of Singapore, it had already been concerned with pursuing consumer protection goals, both from the supply and demand side. Despite these commonalities, there is a potential for conflict between the policy objectives underlying competition and consumer protection law. This essay makes three main suggestions to address potential conflicts between competition and consumer protection objectives, and to further harmonise the competition and consumer protection roles of CCCS.

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Merit

Lua Chang Jie & Terrance Goh Song Kung (Singapore Management University)

Nexus between Competition and Consumer Protection Policies

Given the complementary nature of competition and consumer protection policies, it is not surprising that numerous jurisdictions, including Singapore, have integrated the functions of both under a single agency. In this regard, competition and consumer protection policies share the common goal of seeking to enhance consumer welfare. Where applied, both policies may each make the other more effective. Integrating both functions under a single agency also increases administrative efficiency, and makes available a wider range of remedies. This enables a dual function agency to administer superior cures that involve an optimal mix of regulatory strategies. Notwithstanding the high degree of complementariness that exists between competition and consumer protection policies, challenges arise from integrating both functions. Consumer protection initiatives, such as the imposition of standards and release of pricing information, can negatively affect competition. Similarly, an increase in competition also raises consumer protection concerns, particularly since the motivation of market players may alter and consumers may face difficulties handling the complexities of competition.

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Merit

Tan Jing Yi (National University of Singapore)

Nexus between Competition and Consumer Protection Policies

While competition advocacy is thriving internationally, the phenomenon of competition watchdogs being combined with their consumer protection counterpart raises the question of efficacy. While both have a common goal of improving consumer welfare, both policies have different tools and emphases. Competition policy focuses more on supply-side whereas consumer protection policy focuses more on demand-side determinants. Consumer cases are far more frequent that competition cases. Competition as a tool is also more broad-based whereas consumer protection is more industry-specific. Despite the differences, this paper argues that a merger of both functions will lead to a more comprehensive analysis of a particular market/ sector. While there are cases whereby consumer law and anticompetitive law can both be applied, this is certainly not true for every single case. Nonetheless, this paper proffers that the synergies are not so much in the application of the laws per se, but the way the cases are being analysed. Analysing interactions between consumers and producers in tandem with market structures can lead to a well-rounded view of the market as well as better understanding of the nuances present in the market.

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1^st Prize

Zhang Xiaomenghan & Zhang Qing Yang (SAF Military Police Command)

Nexus between Competition and Consumer Protection Policies

The advancement of consumer welfare and competition are common themes for governments around the world. Yet, approaches on achieving this goal differ greatly on the level of integration deemed necessary between consumer protection and competition policies. While the pursuit of one mission often reinforces the other, the inverse has also been noted. Deregulation can become a culprit of undesirable circumstances such as the rapidly decreasing robustness of the global financial system. Equally so, firms can also abuse consumer protection to edge out competition. These grievances reflect an urgent need for sensible institutional design that balances these two missions. The proper coordination between competition policy and consumer protection requires a careful analysis of the interactions between the two. To that end, we hold the opinion that despite certain trade-offs between the two, the pursuit of one objective generally reinforces the other.

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2^nd Prize

Wong Xue Li & Seow Yu Ning Charlene (Dunman High School)

Nexus between Competition and Consumer Protection Policies

In recent years, there has been increased consensus that competition and consumer protection policies are highly complementary policies that can work hand in hand, by filling in the gaps of the other policy. This is because competition protection policy generally focuses on supply-side issues while consumer protection policy focuses on demand-side issues. This merging of the policies has been increasingly adopted by various competition watchdogs, such as the Competition and Consumer Commission of Singapore (CCCS) as it improves consumer welfare, while ensuring market efficiency. When competition policies such as regulation are implemented as stand-alone measures, they are bound to face limitations such as the inability to detect anti-competitive actions by firms. Furthermore, based on behavioral economics theory, in which there is bounded irrationality in consumers, consumer rights are likely to be undermined. Thus, the strategic way to counter the limitations of both policies would be to merge them together.

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3^rd Prize

Xu Tian Cheng & Bai Jiawei (8th Battalion, Singapore Infantry Regiment)

Nexus between Competition and Consumer Protection Policies

Competition and consumer protection policies are the twin regulatory pillars in the safeguarding of consumer welfare in economic transactions. There exist clear synergies between them: consumer policies allow consumers to optimally exercise the choices enabled by competition, while competitive markets compel producers to abide by consumer policies to appeal to their consumer bases. The integration of both pillars in a single agency is a most contentious topic. There exists no global consensus: countries adopt diverse positions, from full single-agency integration to separate agency management, across the spectrum of agency integration. There are clear merits to integration. Concurrent employment of both consumer protection and competition policy presents a well-rounded approach – acting from both the demand and supply sides – in addressing market issues. Furthermore, introducing a platform for collaboration and discussion increases efficiency in decision-making, allowing market issues to be promptly resolved. Lastly, common processes can be shared by both departments, reducing overlapping efforts and resource wastages.

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Merit

Shawn Ho Cheng Ying & Jiang Zhi Feng (Recently completed National Service)

Nexus between Competition and Consumer Protection Policies

This essay will argue that competition and consumer protection policies are complementary to a large extent. Given that both policies have the common goal of enhancing consumer welfare, harmonisation enables regulators to better identify and address anti-competitive and anti-consumer business practices in an ever-changing economy. This essay proposes that harmonisation should involve a general regulatory framework, as well as industry-specific or sectorial approaches. Furthermore, the functions can be housed in a single agency via the tight synchronisation of competition and consumer policy-making processes. Synchronisation involves the following two procedures. Firstly, both regulators have to decide whether a market issue should be addressed based trade-offs between consumer and competition concerns in the long-term. Secondly, if it is agreed that the problem be addressed, regulators should discuss whether the blunter remedies of competition policy or the more targeted remedies of consumer policy should be applied. Such synchronisation overcomes potential challenges, such as intra-organisational competition for resources and resource wastage arising from duplicated efforts.

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Merit

Zhao Yifan & Wu Jiahui (National Junior College)

Nexus between Competition and Consumer Protection Policies

CCCS has newly taken up the role of consumer protection aside from promoting competition and inhibiting antitrust behaviour in the market. While acknowledging the distinctive nature of consumer protection policies and pro-competition policies, the challenge falls onto CCCS to identify both the intersection of these two areas and the conflicts between them. Despite the consistent and historical efforts in ensuring that supply forces operate smoothly in the market, CCCS needs to keep in mind of the new requirements to collectively benefit consumer welfare by using consumer protection and pro-competition policies either simultaneously or selectively. The B2C e-commerce market in Singapore has groomed over the years. It has always remained as an area of implicit competition due to technological advancements. When looking into this emerging e-commerce market, we identified potential information failure caused by the lack of market transparency and possible collusive behaviour in the form of price matching and vertical restraints.

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Merit

Kim Yu Lim (Hwa Chong Institution)

Nexus between Competition and Consumer Protection Policies

Competition policy addresses issues related to the supply side of the market, clamping on business conduct that impinges on market competition and implementing pro-competitive measures encouraging businesses to enhance efficiency and innovation. On the demand side, consumer protection policy deals with concerns regarding consumers’ rights, safeguarding their interests against unfair trading practices. Underlying these seemingly contrasting policies is a common goal towards ensuring markets function effectively in allocating resources to enhance social welfare. Both competition and consumer protection policies have mutual effects of positive reinforcement on each other. Competition lowers prices and offers a variety of products to make options available, thereby furthering consumer interests, whereas consumer protection facilitates rational consumer choice which activates competition. Evidently, there is potential for markets in Singapore to gain benefits from leveraging on their complementary nature.

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