The Competition & Consumer Commission of Singapore ("CCCS") has imposed fines totalling SGD 32,098 for the rigging of bids for the building and maintenance of the Singapore Zoo and Bird Park among other iconic Singapore park attractions. The CCCS concluded that three construction companies had exchanged sensitive bid information and co-ordinated responses to eight invitations to tender by the Wildlife Reserves Singapore ("WRS") during the period 1 July 2015 to 6 October 2016. The CCCS held that the conduct distorted competition as the parties agreed on bid prices which prevented WRS from obtaining best prices through independent competitive bids.
| what you need to know - key takeaways |
- Bid-rigging arrangements are per se illegal in Singapore. They are, by their very nature, regarded as restricting competition appreciably.
- The standard of proof to be applied in deciding whether an infringement of the prohibition against anticompetitive agreements has been breached is the civil standard: proof on the balance of probabilities. In this case, it was sufficient that on the balance of probabilities there was evidence of bid-rigging based on direct evidence, circumstantial evidence and inferences from established facts.
- The CCCS may only impose financial penalties where it is satisfied that the infringement was committed intentionally or negligently. In this case, the CCCS considered that bid-rigging is, by its very nature, committed intentionally.
- While the parties were all leniency applicants, the CCCS varied the applicable leniency discounts depending on the co-operation and usefulness of the information provided by the parties.
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On 4 June 2020, the CCCS published an infringement decision against three construction companies, Shin Yong Construction Pte Ltd ("Shin Yong"), Geoscapes Pte Ltd ("Geoscapes") and Hong Power Engineering Pte Ltd ("Hong Power") for participating in the rigging of bids for building, construction and maintenance works for WRS' attractions (Jurong Bird Park, Night Safari, Singapore Zoo and River Safari).
The investigation was commenced when the CCCS received a complaint from WRS on the matter. WRS in turn had received emails from an anonymous complainant alleging that bid-rigging had taken place. The CCCS conducted dawn raids at the premises of several WRS vendors, including Shin Yong, Geoscapes and Hong Power, and conducted simultaneous interviews with personnel. During the course of the investigations, the CCCS also requested documents, information and further interviews with all three companies.
Following the dawn raids, Shin Yong applied for leniency, followed by Geoscapes and Hong Power. While each party admitted to participating in bid-rigging, they were unable to identify specifically which invitations to tender they had rigged. WRS was also unable to provide records of bids by the parties due to limitations of its procurement system. From the evidence gathered, the CCCS considered that, at a minimum, Shin Yong had rigged bids in at least eight tenders; Geoscapes had rigged six bids, and Hong Power had rigged five bids. Importantly, the CCCS considered that each of the relevant invitations to tender amounted to a separate infringement and none of the discrete incidents of bid-rigging spanned more than a year.
As bid-rigging is per se illegal pursuant to the Competition Act (Cap. 50B), the CCCS did not have to prove that the bid-rigging conduct resulted in anticompetitive effects.
A number of factors were taken into account in terms of the calculation of penalties, including:
- the extent to which each party cooperated with the CCCS;
- whether the parties provided useful information to the CCCS;
- whether there were any aggravating or mitigating factors (e.g. the CCCS considered the multiple infringements committed by each party to be an aggravating factor); and
- adjustments to prevent the maximum penalty from being exceeded.
The maximum penalty is 10% of the turnover of the business of a party in Singapore for each year of infringement, up to a maximum of 3 years. In the end, financial penalties totalling SGD 32,098 were imposed on the parties. Shin Yong was fined SGD 7,148; Geoscapes was fined SGD 19,739 and Hong Power was fined SGD 5,211.
This infringement decision showcases, inter alia, the CCCS' extremely broad investigative powers (including the ability to raid premises and to compel the provision of information, documents and interviews), as well as its willingness and ability to progress investigations and reach enforcement decisions quickly and efficiently.
