Asia Pacific Competition Law Bulletin
Introduction
Welcome to the April 2016 edition of our bi-monthly Asia Pacific Competition Law Bulletin. As with
our other editions, this bulletin has been produced in collaboration with expert local law firms
around the region: Allens (Australia, New Zealand), Vinod Dhall in collaboration with TT&A (India),
Widyawan & Partners (Indonesia), Mori Hamada & Matsumoto (Japan), Rahmat Lim & Partners
(Malaysia), Allen & Gledhill LLP (Singapore), Lee & Ko (South Korea) and Tsar & Tsai Law Firm
(Taiwan). We hope you continue to find it a useful tool to keep track of antitrust developments
across the Asia Pacific region.
In this edition, we detail the major developments in competition law and policy across the Asia
Pacific region. The legal reform in Thailand is progressing, and Japan is preparing for the
implementation of a new regulatory framework in the electricity sector. In the Philippines, the new
regulator has started to accept merger notifications, and in India the merger notification thresholds
have been revised. In South Korea, the regulator has published revised IP guidelines. The NDRC
in China continues to make progress with the amendment of several pieces of regulation, and the
government is planning to increase the scope of the law and the potential fines for unfair
competition. In Hong Kong, a new CEO has been appointed to head up the Commission.
On the enforcement side of things, important appeals are working their way through the courts in
Australia and the Malaysian regulator has lost its first appeal case. In Indonesia, the Supreme
Court put an end to nearly a decade of debates in the text message cartel saga. In Singapore, the
regulator imposed fines in the financial services sector, a first in the city-state, and in South Korea
the regulator announced a focus on franchise networks.
Finally, this edition of the APAC Bulletin recaps the region’s major developments in the area of
merger control, with a conditional clearance in Singapore, a merger blocked in New Zealand and a
reminder by the Taiwanese regulator that failing to notify can result in a fine.
Australia
China
Hong Kong
India
Indonesia
Japan
Malaysia
New Zealand
Philippines
Singapore
South Korea
Taiwan
Thailand
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Australia
Fiona Crosbie, Sophie Matthiesson and Darcy McLennan, Allens
ACCC granted leave to appeal Flight Centre decision to High Court
On 11 March 2016, the High Court of Australia granted the Australian Competition and Consumer
Commission (“ACCC”) special leave to appeal the finding of the Full Court of the Federal Court in
relation to allegations that Flight Centre attempted to induce three international airlines to enter
into price fixing arrangements.
The ACCC originally instituted proceedings against Flight Centre in March 2012, alleging that on
six occasions between 2005 and 2009, Flight Centre attempted to enter into arrangements with
Singapore Airlines, Malaysian Airlines and Emirates in relation to international air fares offered by
the airlines on their websites. Flight Centre attempted to induce the airlines to agree not to offer
prices below those offered by Flight Centre on its website, to ensure that their “Price Beat
Guarantee” was viable and accurate.
In the Federal Court, Justice Logan found that there was a separate market for booking and
distribution services relating to air travel, and that Flight Centre competed with the relevant airlines
in that market. As such, Flight Centre had tried to induce illegal price fixing arrangements with the
airlines. Flight Centre was ordered to pay penalties totalling US$ 11 million.
On appeal in July 2015, the Full Court of the Federal Court overturned Justice Logan’s judgment.
The Full Court held that there was no separate market for booking and distribution, rather that
Flight Centre was providing an ancillary service to the provision of air travel. Consequently, Flight
Centre, when offering airfares to consumers on its website, was acting as an agent of the airlines,
rather than a competitor. Following this finding, the Full Federal Court overturned Justice Logan’s
decision, on the basis that there can be no illegal price-fixing where the relevant relationship is
between principal and agent and allowed the appeal.
The ACCC considers the matter to be of considerable importance to consumers, as services are
increasingly being offered online to consumers both via intermediaries and directly from the
supplier.
Related link:
The ACCC’s media release can be found here.
ACCC to appeal Federal Court ruling against egg cartel decision
On 10 February 2016, the Federal Court of Australia found that neither Australian Egg Corporation,
Farm Pride Foods and Ironside Management Services (trading as Twelve Oaks Poultry), nor the
two executives respondents, attempted to induce a cartel arrangement.
The ACCC instituted proceedings against Australian Egg and the other corporate and individual
respondents in May 2014. The alleged conduct involved the sharing of information in industry
publications, as well as at an industry summit and other meetings convened to discuss an
oversupply of eggs. The ACCC alleged that the respondents attempted to induce around 20 other
egg producers to enter into agreements containing output restrictions, such as to cull hens or to
dispose of eggs by other means, which created an “atmosphere of crisis” at industry meetings.
The Federal Court agreed that the conduct of Australian Egg and the other respondents could
have amounted to an attempt to induce an arrangement; however, it found that the evidence was
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not sufficient to prove the requisite level of commitment and mutual obligation. The Federal Court
accepted that the Australian Egg and the other respondents had encouraged action with respect to
reducing supply, but did not find that they had aimed to facilitate a binding consensus amongst egg
producers.
The ACCC has reiterated its focus on enforcing the cartel provisions of the Competition and
Consumer Act 2010. In relation to its decision to appeal the Federal Court decision, the ACCC has
said that it seeks clarity from the Full Court of the Federal Court as to what will constitute
attempted cartel conduct, particularly in the context of industry association meetings.
On 2 March 2016, the ACCC announced that it would appeal the decision to the Full Federal
Court.
Related links:
The ACCC’s media release on the Federal Court decision can be found here.
The ACCC’s media release on the Notice of Appeal can be found here.
Government to adopt Harper review misuse of market power “effects test”
On 16 March 2016, the Turnbull Government announced that it would adopt the Harper Review’s
recommendations regarding the section 46 prohibition of misuse of market power. The main
aspect of this recommendation is the removal of the “taking advantage of” element and the
introduction of an “effects test”, subject to a substantial lessening of competition standard. Under
the proposed new law, a firm with a substantial degree of market power must not engage in
unilateral conduct that has the purpose, effect or likely effect of substantially lessening
competition.
In a press release the Prime Minister and Minister for Small Business, Kelly O’Dwyer, announced
that the government intends to implement the changes to section 46 as recommended by the
Harper Review into Competition Policy published in 2015. If the reform goes ahead, section 46 will
capture a much broader range of conduct than the existing prohibition.
The change has been met with criticism from the Labour Party, the Business Council of Australia
and the Retail Council, who argue that the new test will introduce significant legal uncertainty, and
may chill pro-competitive and legitimate commercial conduct.
At the same time, the proposed reform is being hailed by consumer advocacy groups and small
businesses as a boost for competition and innovation in markets which feature one or several
companies with large market shares.
Related link:
The Government’s announcement can be found here.
China
Fay Zhou and Yuan Cheng, Linklaters
Publication of drafts of new antitrust guidelines
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As previously reported in the Bulletin, China’s National Development and Reform Commission,
under the supervision of the State Council’s Anti-Monopoly Commission, is currently in charge of
drafting six sets of new antitrust guidelines. The draft guidelines aim to provide more clarity on key
substantive and procedural aspects of the Chinese antitrust enforcement. It is understood that by
June this year the guidelines will be submitted to the State Council for review, with at least some of
the guidelines to be issued by the end of 2016.
Over the past few months, the following draft guidelines have been published for consultation:

Auto antitrust guidelines. China’s first ever industry-specific antitrust guidelines encompass
the framework, principles and methodology for assessing monopoly agreements and abuse of
market dominance in the automobile industry. Taking into account the specific features of the
industry, the guidelines provide a number of presumptions which exempt monopoly
agreements, including (i) exceptions on resale price maintenance such as the “middle-man”
situation (i.e. where a supplier and an end-user have agreed on prices and a distributor is
appointed only to provide support such as in relation to delivery, payment or invoicing) and (ii)
exemptions on territorial and customer restrictions where car manufacturers’ market shares
fall below 25-30%.

IP antitrust guidelines. These guidelines set out the basic analytical framework, introduce new
IP-specific concepts such as “relevant technology market”, and outline the general principles
of antitrust enforcement. They also introduce the long-awaited “safe harbour” rules, which
presume the exercise of IP rights does not infringe the Anti-Monopoly Law if the IP owner has
relatively modest market shares or there are sufficient alternative technologies in the market
available on reasonable terms.

Commitment guidelines. These guidelines shed light on the commitment process i.e. an
agreement between a company and a regulator to suspend the investigation and close the
case without finding an infringement or imposing penalties.

Leniency guidelines. These guidelines set out the authorities’ approach to leniency
applications, including the evidence required, the eligibility criteria and the immunity or
reduction in fines which is to be expected. They also introduce a marker system similar to the
EU system which allows the applicant to reserve its first place in the queue by submitting
initial documentary evidence, with additional materials to follow at a later stage.
The remaining two sets of guidelines, which relate to the exemption procedure for anticompetitive
agreements and the calculation of fines and illegal gains, are also expected to be published for
public consultation in the coming months.
Amendments to Anti-Unfair Competition Law
On 25 February 2016, the Legal Affairs Office of the State Council launched a public consultation
on the proposed revisions to the Anti-Unfair Competition Law which has been in force since 1993.
The following key changes have been proposed:

the amendments seek to remove certain provisions that overlap with the Anti-Monopoly Law,
including those relating to restrictive conduct by publicly-owned enterprises, tying and
bundling, below-cost sales and abuse of administrative powers. In the future, tying/bundling
and below-cost sales practices could potentially only violate the Anti-Monopoly Law, which in
turn, requires proof of a dominant market position.
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
the draft introduces certain new types of infringements such as an imposition of unfair trading
conditions on the counterparty by using a “relatively superior position”. However, such new
concepts have sparked controversy and it remains to be seen whether they will be included in
the final version;

the draft defines commercial bribery, which broadly refers to providing, or promising to
provide, economic interests to the counterparty or third parties with a view of gaining business
opportunities or competitive advantages; and

fines will generally be based on the so-called “illegal turnover” of the business operator,
instead of “illegal gains” as under the current regime, which may result in more severe
penalties imposed by the regulators.
Hong Kong
Clara Ingen-Housz and Anna Mitchell, Linklaters
Government answers questions from LegCo members about the reach of the
Competition Ordinance
The Hong Kong government has, during a scheduled weekly meeting of the Legislative Council
(“LegCo”), responded to a series of questions relating to the scope of the Competition Ordinance,
and its application to statutory bodies and other exempt bodies under the law.
A number of LegCo members asked questions to Gregory So Kam-Leung, Secretary for
Commerce and Economic Development. LegCo members enquired about whether the Ordinance
has the ability to tackle perceived anti-competitive behaviour in the retail oil sector and the building
management sector. Mr So underlined that although the Ordinance was not designed to focus on
one industry in particular or to regulate prices, the Competition Commission is already looking into
these two sectors and he reassured lawmakers that the Commission will investigate if it finds signs
of anti-competitive conduct.
LegCo member Kenneth Leung Kai cheong asked a number of questions relating to statutory
bodies and other exempt entities under the Ordinance, including whether the government had
evaluated the possible impact of the wide exemption granted to statutory bodies, and if, for
instance, the government had found signs of anti-competitive conduct taking place amongst
exempt bodies. Mr So, who also provided a detailed reply in writing following the meeting,
reiterated the government’s efforts towards pro-competitive policies, explaining that the
government has set-up an advisory body, the Competition Policy Advisory Group, which is in
charge of receiving complaints against statutory bodies and other exempt entities. He confirmed
that the government will consider including in the scope of the Ordinance the entities which are
found to have breached it, when the government reviews the Ordinance in three years’ time.
Related link:
Gregory So’s written reply to LegCo can be found here.
Head of the competition authority steps down, replaced by Senior Executive
Director Rose Webb
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On 7 March 2016, Stanley Wong resigned from his position as the CEO of the Commission for
health reasons. Rose Webb, a regulator with 25 years of experience, who joined the Commission
two years ago as Senior Executive Director has taken over the role. Prior to her appointment to the
Commission, she was Executive General Manager, Mergers and Adjudication at the Australian
Competition and Consumer Commission. She has also held positions at other authorities, such as
the Australian Securities and Investment Commission.
Rose Webb is a well-known figure on the Hong Kong competition scene, having represented the
Commission at numerous conferences and events. She has been particularly active in engaging
with the business community, and in the outreach and education efforts of the Commission.
Related link:
The Commission’s press release can be found here.
India
Vinod Dhall and Avinash Amarnath in collaboration with TT&A
Indian merger control thresholds revised
The Government of India has amended the country’s merger control thresholds through three
separate notifications published on 4 March 2016.
The first notification extends the validity of the de minimis exemption for a further period of five
years (i.e. until 4 March 2021) and increases the financial thresholds. Consequently, if:

the value of assets of the target in India does not exceed INR 3.5 billion (approximately US$
52 million); or

the turnover of the target in India does not exceed INR 10 billion (approximately US$ 151
million),
the transaction is not notifiable to the Competition Commission of India (“CCI”).
If an acquisition does not qualify for the de minimis exemption, the parties will still have to assess
whether any one of the eight thresholds provided under section 5 of the Competition Act, 2002 is
exceeded. The second notification increases such financial thresholds by 100% in an attempt to
foster the ease of doing business in India.
Finally, the third notification extends for a further five years (i.e. until 3 March 2021) the exemption
applicable to a “group” exercising less than 50% voting rights in another enterprise.
Related links:
The notifications are available here.
CCI dismisses complaints against taxi aggregators Uber and Ola
The CCI dismissed two separate complaints filed by the radio taxi operators Meru and Mega Cabs
against the taxi aggregators Uber and Ola.
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The complainants had alleged that both Uber and Ola had abused their dominant positions by:

engaging in predatory pricing;

offering unreasonably high incentives to drivers to keep them “attached to its network”; and

offering loyalty inducing discounts and benefits to consumers which led to discrimination in
pricing.
In both judgments, the CCI concluded that neither Uber nor Ola were dominant within the relevant
market as the evidence put forward did not substantiate such propositions.
Related links:
The full orders of the CCI are available here and here.
Indonesia
David Holme, Karen Phang and Perdana Saputro, Widyawan & Partners
Supreme Court confirms text message cartel decisions
The Indonesian Business Competition Supervisory Commission (“KPPU”) has emerged victorious
in the text message cartel saga, with the Supreme Court upholding a KPPU decision against
telecoms companies. The Supreme Court decision is particularly important in light of previous
reversals and set-backs in Indonesian courts, with the KPPU has often losing on appeal because it
could not prove the existence of a cartel agreement.
The KPPU proceeding revealed that the cartel practices occurred during 2004 through 2008 and
brought estimated consumer losses of IDR 2.8 trillion (approximately US$ 210 million). The KPPU
found that there was a written cartel agreement between telecommunication operators which
agreed a minimum tariff for text messages in the range of IDR 250 - IDR 350. The KPPU
considered that the SMS tariff should be IDR 114, around 45% below the lower end of the range
set out in the cartel agreements.
The KPPU’s decision on 18 June 2008 was annulled by the Central Jakarta District Court in May
2015. The KPPU then appealed to the Supreme Court, which, in February 2016, affirmed the
KPPU’s decision and imposed fines ranging from IDR 4 billion (approximately US$ 300,000) and
IDR 25 billion (approximately US$ 1.8 million) on five telecom companies.
Japan
Kenji Ito and Aruto Kagami, Mori Hamada & Matsumoto
JFTC and Ministry of Economy jointly published a partial amendment to the
country’s electricity guidelines
On 7 March 2016, the Japan Fair Trade Commission (“JFTC”) and the Ministry of Economy, Trade
and Industry jointly published a partial amendment to the Guidelines for Proper Electric Power
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Trade, in anticipation of the amendment to the Electricity Business Act of 1964 coming into force in
April 2016.
Consumption of electricity in Japan is divided into two major sectors: (i) the large business sector,
such as manufacturing facilities and (ii) the consumer and small business sector. Currently, the
second sector is supplied by state-sanctioned regional monopolies, whilst the first sector has the
right to obtain electricity from any utility provider regardless of its location.
The amendment to the Act will fully liberalise the retail electricity business by abolishing the current
system of regional monopolies for the consumer and small business sector. The amended
guidelines seek to address some of the potential problems that may arise following such abolition
by clearly fleshing out that tying of products and services which impede or hamper new entrants
from competing against the former regional monopolies might constitute “private monopolisation”
or “unfair trade practices” under the Anti-Monopoly Act. Additionally, unfair interference by the
former regional monopolies of customers’ switching to different electricity providers might be illegal
for the same reasons.
Related link:
The press release can be found here (in Japanese).
Malaysia
Raymond Yong and Penny Wong, Rahmat Lim & Partners
Competition Appeal Tribunal overturns MyCC’s infringement finding against
Malaysian Airline and AirAsia
On 4 February 2016, the Competition Appeal Tribunal (“CAT”) unanimously overturned the fines
imposed by the Malaysia Competition Commission (“MyCC”) against Malaysian Airline and
AirAsia. On 31 March 2014, Malaysian Airline and AirAsia were fined RM 10 million each
(approximately US$ 2.5 million) for infringing section 4(2) of the Competition Act 2010 by entering
into an agreement with the object of sharing markets within the air transport services sector in
Malaysia. This is the first ever ruling by the CAT.
In arriving at its decision, the CAT took into consideration the following grounds:
(i)
the MyCC had misinterpreted the Act to ascertain the mutual intentions of the parties;
(ii)
the MyCC failed to establish a causal link between the decision by Malaysian Airline to
withdraw from the East Malaysian route and any alleged anti-competitive agreement. The
withdrawal was not part of the collaboration agreement entered into between Malaysian
Airline and AirAsia but was decided by Malaysian Airline independently; and
(iii)
the Competition Act cannot be applied retrospectively. The MyCC should not have taken
into consideration events and circumstances which took place prior to the coming into
force of the Act.
The regulator is expected to file for judicial review.
Related link:
A copy of the CAT’s decision is available here.
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New Zealand
Fiona Crosbie, Sophie Matthiesson and Darcy McLennan, Allens
New Zealand Commerce Commission declines Tennex Capital’s acquisition of
San-i-pak
On 1 March 2016, the New Zealand Commerce Commission (“NZCC”) declined an application
from Tennex Capital, owners of International Waste, to acquire the medical and quarantine waste
business of San-i-pak.
International Waste provides medical and quarantine waste collection, treatment and disposal
services, as well as other related services. It operates facilities in Auckland, Wellington,
Christchurch and Dunedin. San-i-pak provides medical and quarantine waste collection, treatment
and disposal services, as well as general waste services. It operates a single facility in
Christchurch, and collects medical and quarantine waste primarily in the greater Canterbury
region.
The NZCC was not satisfied that the merger of International Waste and San-i-pak would not have
the likely effect of substantially lessening competition in the supply of treatment and disposal of
medical and quarantine waste services in the South Island. The NZCC stated that International
Waste and San-i-pak are the only parties in the South Island currently providing the treatment and
disposal of medical and quarantine waste services and that the merger would reduce the market to
a monopoly.
Tennex submitted that if the acquisition did not go ahead, San-i-pak would exit the market.
However, the NZCC was unable to exclude the possibility that San-i-pak would continue to
operate, whether under its current owners or under the ownership of a third party after sale.
The NZCC was similarly not satisfied that other competitors would enter the market to provide
competition if the acquisition went ahead.
Accordingly, there was a real chance that the acquisition would increase the prices paid for the
treatment and disposal of medical and quarantine waste services and, on that basis, rejected the
application.
Related link:
The NZCC media release can be found here.
New Zealand Commerce Commission clears Coty’s acquisition of Procter &
Gamble’s cosmetics and fragrance brands
On 23 February 2016, the NZCC gave clearance for Coty to acquire a significant part of the global
hair care, colouring and styling, colour cosmetics and fragrance businesses of Procter & Gamble.
Coty and P&G are large international suppliers of hair and beauty products. In New Zealand, both
parties’ products are currently distributed by the same company.
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The NZCC’s investigation focused on nail products and men’s prestige fragrances, as there was
limited New Zealand overlap among the companies’ other cosmetic, hair care and body care
product lines.
The NZCC was satisfied that the acquisition would not have, or would not be likely to have, the
effect of substantially lessening competition in the relevant markets. The relevant markets were
considered to contain a wide variety of brands, significant product turnover, and many active
participants.
The NZCC did not think that Coty would gain substantial market power through this transaction,
due to the ability of retailers and consumers to shift to other products or source the products from
elsewhere.
Related link:
The Commerce Commission’s media release can be found here.
Philippines
Clara Ingen-Housz and Anna Mitchell, Linklaters
Interim merger control in the Philippines – authority now accepting
notifications
The newly established Philippine Competition Commission has published an interim arrangement
to accept simplified merger notifications. Notifications are mandatory for transactions which satisfy
the transaction value threshold during the interim period.
The regime is being brought into effect in stages, with companies benefiting from a two-year grace
period from the provisions against anti-competitive agreements and abuse of dominance.
However, pursuant to the interim measures published by the Commission, mergers that fall within
the thresholds must be notified to the Commission as of 8 March 2016.
Implementing rules for the notification of mergers have not yet been issued and there is no clear
indication as to when they are likely to be published. However, on 12 February 2016, the
Commission published two circulars setting out a transitional notification arrangement. Any
transactions which meet the requisite threshold (i.e. that the merger or acquisition is valued at
more than one billion pesos (approximately US$ 21 million)) and which are “executed or
implemented” after 8 March 2016 must be notified by way of a letter to the Commission. At
present, it is not clear how the “the value of the transaction” will be interpreted and whether
foreign-to-foreign transactions with no nexus to the Philippines will be caught by the new regime. It
is expected that the implementing rules that are due to be published by the Commission will
provide more clarity on this point but, until such publication, parties must decide whether to notify
the Commission on the basis of their own interpretation of “the value of the transaction”.
Any merger or acquisition valued at more than one billion pesos “executed or implemented” after 8
March 2016 must be notified to the Commission in the requisite form, prior to the transaction being
executed or implemented. For mergers involving at least one SEC-regulated entity, the parties
must notify the Commission before the close of business of the first working day after the
transaction occurs. Transactions notified in this form with the Commission will be deemed to be
approved (assuming that no false material information has been provided).
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Transactions must be notified by way of a letter addressed to the Commission, which must contain
the following information:

details relating to the parties to the merger or acquisition;

name and contact details of the authorised representatives of each of the parties to the
merger or acquisition to whom the Commission may address any correspondence;

a brief description of the businesses of the parties to the transaction;

type of transaction (whether a merger or an acquisition);

consideration;

key terms of the transaction; and

timing for the execution or implementation of the transaction.
Mergers and acquisitions effected in violation of the obligation to notify will be considered void and
the parties will be exposed to fines of 1% to 5% of the value of the transaction.
Given the relatively low threshold for notification of mergers and acquisitions, notification in the
Philippines is likely to be an important consideration for many businesses active in the M&A space.
Until the formal implementing rules have been issued, merging parties benefit from a simple
regime to notify mergers and have them automatically approved. In the case of the other
provisions introduced by the law last year (including against cartels and abuse of a dominant
position), a two-year grace period is built into the law. However, the Philippines government has
fast-tracked the establishment of the Commission, indicating that it considers competition policy to
be an important priority for its economic development.
Related links:
The circular establishing the interim merger regime for non SEC-regulated companies can be
found here.
The circular establishing the interim merger regime for SEC-regulated companies can be found
here.
Singapore
Daren Shiau and Elsa Chen, Allen & Gledhill LLP
Second-ever conditional
commitments
merger
clearance
requiring
Singapore-specific
On 3 March 2016, the Competition Commission of Singapore (the “CCS”) announced its secondever conditional clearance of a proposed acquisition. This is also the third CCS merger review in
the last 17 months where commitments were sought with an emphasis on Singapore-specific
effects. It is therefore important for merger parties to consider Singapore-specific remedies as part
of their global merger clearance strategies.
The transaction related to the acquisition of Safegate International by ADB, both active in the
provision of airfield lighting systems. The CCS announced on 14 August 2015 that it had
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completed its Phase 1 review of the proposed acquisition and it raised several competition
concerns based on the parties’ significant market share (i.e. more than 80%) and high barriers to
entry in the form of extensive testing requirements. The CCS concluded that the proposed
acquisition may significantly reduce the level of competition and lead to price increases and
deterioration in quality and/or technical support.
Following a public consultation in December 2015, the CCS considered feedback from end-user
customers, third-party contractors and competitors of the Parties, and it accepted the following
behavioural commitments proposed by the parties to address the CCS’s competition concerns:
CCS’s competition concerns
Commitments proposed by ADB
Fixed prices adjusted only for inflation for certain
(a) Significant post-merger price increase
products sold to any airport operator for use in
due to substantial reduction of
competition in the short to medium term Singapore.
(b) Reduced supply of spare parts and
technical support to customers
Guaranteed supply of spare parts along with
technical support for specific products sold to any
airport operator for use in Singapore for a period
of 10 years.
(c) Possible “lock in” of third party
contractors and suppliers in Singapore
using exclusive agreements
Commitment for a period of four years not to
enter into any agreements with third party
contractors or suppliers in Singapore which
expressly prevent or have the effect of preventing
third party contractors or suppliers from carrying,
promoting or offering alternative competing
products and services.
(d) Possible retroactive termination of, or
jeopardising of, agreements concluded
before the completion of the proposed
acquisition
Commitment to continue in full force and effect
pre-acquisition contracts or agreements relating
to the sale of specific products entered into
between the parties or a third party and an airport
operator in Singapore.
(e) Ensuring compliance with the proposed
commitments
Commitment to regularly provide the CCS with an
independent audit report.
The proposed acquisition has also been notified in Australia, Austria, Cyprus, Russia and Spain
and has been cleared in these jurisdictions.
Related links:
The CCS decision can be found here.
CCS issues its first infringement decision involving financial services
On 17 March 2016, the CCS announced that it had issued an infringement decision against 10
financial advisory companies in Singapore. This is the first infringement decision issued in the
financial services industry and also the first infringement finding by the CCS for an agreement by
members of an association to collectively pressure a competitor to withdraw an offer, as opposed
to explicit collusive acts such as price-fixing, bid-rigging and/or marketing sharing.
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The 10 financial advisory companies were found to be party to an anti-competitive agreement by
collectively pressurising their competitor iFAST to withdraw its offer of a 50% commission rebate
on life insurance products on its online platform, Fundsupermart.com. Financial penalties have
been imposed on the parties amounting to a total of S$ 909,302 (approximately US$ 670,000),
with the highest penalties amounting to S$ 405,114 (approximately US$ 300,000).
The CCS became aware through media reports and an anonymous complaint that iFAST
launched its offer on 30 April 2013 and withdrew it a few days later on 3 May 2013. The CCS’s
investigation revealed that:

there was general agreement during an Association of Financial Advisers (Singapore)
meeting followed by further coordination among the parties to collectively pressurise iFAST to
withdraw its offer within a few days of its launch;

some of the parties involved had expressed their concern about their own customers
switching to iFAST or seeking rebates similar to those offered by iFast; and

the Parties’ commercial relationship with iFAST in its unit trust business contributed
significantly to iFAST’s revenues and placed them in a position to exert pressure on iFAST.
The CCS concluded that the parties’ conduct to prevent a competitor from providing a lower-cost
offer to consumers restricted and was likely to have had an adverse effect on competition in the
market. The CCS found that iFAST’s offer was particularly attractive to customers as the general
industry practice of financial advisers is not to provide commission rebates to policyholders. If
iFAST’s offer had remained on the market, the Parties might have had to make similar or new
offers to respond to the competitive threat of commission rebates.
Related link:
The CCS decision can be found here.
South Korea
Yong Seok Ahn and Bryan E. Hopkins, Lee & Ko
KFTC issues revised guidelines on intellectual property rights
In an attempt to foster fair patent enforcement and increase predictability, the Korea Fair Trade
Commission (“KFTC”) has revised its intellectual property rights guidelines, which, amongst other
things:

shed light on the definition of “standard technology”;

explain what “standard essential patents” (“SEP”) entail;

provide further clarity on “de facto SEPs”; and

offer additional guidance on unfair refusal of licensing applications.
Accordingly, following the amendments brought about by the guidelines:

“standard technology” only encompasses parameters set by standard setting organisations;
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
“SEPs” comprise patents which obtain a voluntary fair, reasonable and non-discriminatory
commitment from patent holders to be adopted as standard technology (e.g. CDMA (2G));

“de facto SEPs” refer to technology which has become standard as a result of normal market
competition (e.g. blu-ray) as opposed to being adopted by a standard setting organisation.
The KFTC has acknowledged the intrinsic differences between SEPs and de facto SEPs and
has removed the provision which imposed the same regulatory requirements on both; and

when assessing whether a licence application has been unfairly refused, the KFTC will pay
attention to (a) the intention for rejecting the licence, (b) the competitive restraints on
competition, and (c) the alternatives available to the applicant.
KFTC focuses on food franchise industry
The KFTC has directed its attention to the food franchise industry by launching an ex officio
investigation on alleged abuse of dominance by franchisors. The Chairman of the KFTC, Jung
Jae-chan, has held discussions with 12 parties operating in the industry and urged them to use the
KFTC’s anonymous reporting centre more actively. In turn, the KFTC offered to introduce new
regulation to prevent retaliation from franchisors for reporting such misconduct.
In parallel, the KFTC fined Genesis BBQ, a local fried chicken food chain, for making unfounded
profitability claims to recruit new franchisees. In addition, a local government reported food
franchise Teacher Kim to the regulator for potential abuse of dominance. The franchisor is accused
of selling food to its franchisees at above-market prices and of dumping advertising expenses on
the network’s shops. Some shops reportedly closed in reaction to the franchisor’s practices. These
two cases illustrate the tensions between franchisors and franchisees, and the potential use of
competition rules to ensure that franchisees do not suffer from abuse.
The regulator is also launching a revised version of an online tool allowing companies to compare
the terms offered by franchisors so as to increase competition among brands for the recruitment of
new franchisees.
Taiwan
Matt Liu and Albert Liao, Tsar & Tsai Law Firm
TFTC fines taxi for failure to notify
The Taiwan Fair Trade Commission (“TFTC”) has fined the on-demand taxi service operator,
Taiwan Taxi, approximately US$ 7,675 for failing to notify its acquisition of GBG, an express
delivery business of small items such as documents, products and gifts.
A TFTC investigation revealed that Taiwan Taxi and GBG entered into an agreement on 17 June
2014 to acquire 100% of the shares in GBG and direct control over the appointment and discharge
of GBG’s personnel.
The TFTC held that Taiwan Taxi is in the “taxi dispatch service market,” and GBG is in the “express
delivery service market”, and concluded that the transaction between the two was a conglomerate
merger. Taiwan Taxi was fined NT$ 250,000 (approximately US$ 7,675) and it is required to file a
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merger notification within three months. Based on public information, the TFTC has yet to make a
decision on the conglomerate merger between Taiwan Taxi and GBG.
Related link:
The TFTC decision can be found here (in Chinese).
Thailand
Pornpan Chayasuntorn, Ueamduean Jerasantpich and Wilailuk Okanurak, Linklaters
Bangkok
Cabinet approves the proposed amendments to the Trade Competition Act
Following the Thai government’s initiative to reform its trade competition law, the Cabinet has
approved amendments to the country’s competition law. As reported previously in the Bulletin, the
amendments are aimed at aligning Thai competition law with international practice and
strengthening the enforcement of competition law, which has remained largely ineffective until
now.
The key amendments include the following:

state enterprises will be subject to the new Trade Competition Act; however, an exemption will
be granted to any actions which are permitted or required by law, national security or public
interest;

the new definition of a business operator will include affiliated entities. The criteria for
determining affiliate status will be based on majority shareholding ratio and/or managing
control. The objective is to bring into the scope of competition law abuses of a dominant
position where a business operator splits its businesses into several entities to avoid being
considered dominant;

the term “market dominance” will take into account factors such as number of players in the
market, barriers to entry, distribution channels and basic facilities required for operation of the
business;

mergers and acquisitions will be subject to certain reporting requirements. Pre-merger
approval will no longer be required; and

the Thai competition authority might impose an administrative fine for failure to comply with an
order, which can escalate to a lawsuit if the business operator fails to pay the fine.
The draft amendment has been passed onto the Council of State for further consideration and will
be subsequently submitted to the National Legislation Assembly for final review. The changes are
expected to enter into force in 2016.
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