Case Update: Landmark Appeal– CAB Clarifies Key Competition Law Principles in CCCS Price Fixing Decision
A commentary on CNL Logistic Solutions Pte Ltd and other [2025] SGCAB 1
By Ronald JJ Wong, Stuart Peter and James Tan
I. Introduction and Background Facts
1. The Competition Appeal Board (CAB) recently delivered a landmark decision in Appeal No. 1 of 2023, overturning an Infringement Decision (“ID”) issued by the Competition and Consumer Commission of Singapore (CCCS) against CNL Logistic Solutions Pte Ltd and Gilmon Transportation & Warehousing Pte Ltd (the “Appellants”). Our firm successfully acted for the Appellants in the appeal. The CCCS had previously found that four undertakings, including the Appellants, had infringed Section 34 of the Competition Act 2004 by engaging in alleged price fixing among warehouse operators at Keppel Distripark. Specifically, the CCCS alleged that the Appellants had engaged in an agreement and/or concerted practice to fix the price of warehousing services by coordinating the imposition of an “FTZ Surcharge”.
2. This appeal represents an unprecedented success for an appellant in challenging an infringement decision on liability by the CCCS. The CAB's decision provides crucial clarifications on the application of Singapore's competition law, particularly concerning the definitions of anti-competitive conduct and the strict interpretation of the “by object” prohibition.
3. The background to the CCCS's ID involved warehouse operators at Keppel Distripark, a multi-tenanted cargo distribution complex and free trade zone. The CCCS's findings stemmed from the announcement of an “FTZ Surcharge” by Hup Soon Cheong Pte Ltd (“HSC”), the largest warehouse operator, on 15 June 2017. Other operators, including the Appellants, subsequently adopted this surcharge.
4. The CCCS's case against the Appellants was twofold: first, that a meeting took place on 15 June 2017 (the “15 June 2017 Meeting”) where the Appellants' representatives allegedly invited a competitor Penanshin to adopt the surcharge and to check with another competitor Mac-Nels; and second, even if this meeting did not occur, that an exchange of pricing information (the “Communications”) between the undertakings constituted a concerted practice. The CCCS viewed this conduct as “Price Fixing Conduct” because the Appellants had contacted competitors to inform them of their future pricing intentions, asked about others' intentions, and received information that others would follow. The CCCS concluded that this amounted to an agreement and/or concerted practice to fix the price of warehousing services.
II. CAB's Factual Findings: The Absence of an “Agreement”
5. The CAB meticulously examined the CCCS's evidence and grounds for finding an agreement. The CCCS's assertion that an agreement was formed was “predicated” on the 15 June 2017 Meeting having taken place and relied primarily on Penanshin's leniency statement and interviews with Penanshin’s employee Yasrin, which alleged that the 15 June 2017 Meeting took place. However, the Appellants disputed this meeting ever occurred.
6. The CAB found that the evidence regarding the 15 June 2017 Meeting amounted to a “he said, she said” situation, with no other direct evidence beyond the notes of interviews of Yasrin and the Appellants’ representatives. The individuals involved were never cross-examined. The Board noted significant discrepancies in Yasrin (Penanshin)'s accounts, particularly his failure to mention the meeting in an earlier interview and misidentification of Gilmon's representative. While the CCCS dismissed these as “not material,” the CAB considered them significant, questioning the reliability of the statements. These discrepancies were never raised to Yasrin (Penanshin) for clarification, and no opportunity was afforded to the Appellants’ representatives to establish the consistency of their evidence regarding the meeting. The Board also highlighted that Yasrin (Penanshin)'s 2019 interview suggested he was the initiator of contact with other warehouse operators, which would alter his leniency status and provide Penanshin an incentive to shift blame to other operators.
7. Given these inconsistencies and the “economic incentive” for Penanshin to shape its narrative, the CAB concluded that diminished weight should be accorded to Penanshin's and Yasrin (Penanshin)'s statements. The supporting circumstantial evidence, such as messages from Yasrin (Penanshin) to Mac-Nels and the Appellants' representatives, were found to be ambiguous and did not independently enhance the credibility of the alleged meeting. Consequently, the CAB found that the CCCS had not discharged its burden of proving the occurrence of the 15 June 2017 Meeting on a balance of probabilities, failing to meet the “strong and convincing evidence” standard required for infringement allegations. As the CCCS's case for an “agreement” was “predicated” on this meeting, that aspect of the CCCS's case failed. The Board also found that the other telephone conversations between the parties did not establish an “agreement” or “consensus”.
III. CAB's Legal Clarifications: Defining Anti-Competitive Conduct and the “By Object” Limb
8. The CAB's decision provided significant legal clarifications, particularly regarding the distinct definitions of “agreement” and “concerted practice,” and the scope of the “by object” limb of the Section 34 Prohibition:
A. Distinction Between “Agreement” and “Concerted Practice”
9. The CAB reiterated that while “agreements” involve a voluntary consensus regardless of form (written, oral, or gentlemen's agreements) and do not require proving subsequent market conduct, “concerted practices” require more. For a “concerted practice,” there must be (i) direct or indirect contact that reduces uncertainty about future market conduct, (ii) subsequent market conduct from which concertation may be inferred, and (iii) a causal relationship between the two elements. This distinction necessitates a more detailed investigation into the character of engagement, subsequent market conduct, and prevailing market conditions for concerted practices. The Board noted that while not mutually incompatible, careful delineation and characterisation of each element of infringement (as an agreement or concerted practice) would aid analytical clarity.
B. Restrictive Interpretation of the “By Object” Limb
10. The CAB stressed that the “by object” concept, which presumes harm to competition without requiring proof of actual effects, must be interpreted restrictively. It applies only to conduct that is “by their very nature, harmful to the proper functioning of normal competition” or reveals “a sufficient degree of harm to competition”. This typically includes only the most egregious and obviously harmful anti-competitive conduct such as price fixing, market sharing, output limitations, and bid-rigging. The Board emphasized the necessity of proper characterization of the allegedly anti-competitive conduct before applying this limb, warning against its over-expansion.
C. “Price Fixing” Versus “Information Sharing”
11. The CAB critically held that the CCCS's broad definition of “price fixing” as any form of conduct facilitating the coordination of future pricing conduct between competitors was “plainly too broad”. The Board clarified that while price fixing involves an agreement to fix prices, information sharing, such as unilateral disclosures of pricing intentions, is a distinct category and should not automatically be equated with price fixing.
12. The Board pointed out that unlike price fixing, information sharing's effect on competition is not always presumed harmful; it depends on the circumstances of each individual case: the market characteristics, the type of information and the way in which it is exchanged.
13. For information sharing to be a “by object” infringement, there must be an adequate examination of the surrounding economic context, market structure, and the nature of the information exchanged. The CAB illustrated this point with a hypothetical of chicken rice sellers in the same hawker centre, demonstrating that a rigid application without considering market context (e.g., small market players, oligopolistic conditions, number of competitors) would lead to an “unreasonably wide extension of liability” and “impracticality”.
14. The Board noted that the CCCS had not adequately examined the relevant market structure and economic conditions in the present case to justify a “by object” finding for the alleged information exchange.
IV. Significance for Market Conduct, Especially Information Sharing
15. The CAB's decision carries significant implications for market players and competition law in Singapore.
A. Heightened Scrutiny for “By Object” Allegations
16. The ruling reinforces that the “by object” limb is generally applicable only to the most overtly harmful conduct. This means that the CCCS cannot simply label any conduct involving price-related discussions as “price fixing” to automatically presume harm. It must either prove an agreement to fix prices or, for information sharing, conduct a rigorous and coherent analysis of the circumstances and context to justify a “by object” finding. This provides greater certainty for businesses, as the threshold for an “object” infringement is now clearer and stricter.
B. Nuanced Approach to Information Sharing
17. The explicit distinction between “price fixing” and “information sharing” is a critical development. It acknowledges that not all exchanges of price-related information are equally harmful. However, businesses engaging in private disclosures or exchanges of information must still be aware of the “real legal risks”. Depending on the nature of information exchanged and their specific surrounding economic circumstances, such communications may infringe competition law.
C. Burden of Proof on the Competition Authority
18. The decision strongly reiterates that the CCCS bears the burden of proving infringement on a “balance of probabilities,” requiring “strong and convincing evidence”. For findings of “by object” infringement, the economic reasoning underlying a finding of infringement must be presented “clearly and coherently”. The CAB's ruling serves as a vital reminder that competition law enforcement must be grounded in robust factual findings and sound economic analysis to avoid “undesirable legal uncertainty for market players”. Businesses which are investigated or found by the CCCS in a Proposed Infringement Decision to have infringed competition law should seek counsel to critically examine the evidence and economic analysis and consider their legal options accordingly.
Ronald JJ Wong, Stuart Peter and James Tan from Covenant Chambers LLC successfully acted for the appellants in this case. For questions on this article or on property-related disputes, please feel free to contact them by email.
Ronald JJ Wong
Deputy Managing Director
James Tan
Counsel
Stuart Peter
Associate Director
