The Competition Commission of Singapore has launched a study to look into the growing local e-commerce space, and it finds that industry growth does not “necessarily call for a more or less interventionist approach” by competition authorities.
SINGAPORE: There is no need for a “more or less interventionist approach” by the Competition Commission of Singapore (CCS) in the growing e-commerce space, and interventions should be “targeted and made on a case-by-case basis”, according to a study released on Wednesday (Dec 2).
Commissioned by the CCS and conducted by economic consultancy firm DotEcon, the study found that the Republic’s competition law and analytical frameworks are “generally well suited to address e-commerce-related competition issues”.
“This is consistent with the views of competition authorities in the Organisation for Economic Co-operation and Development (OECD) which are in agreement that existing competition assessment frameworks are valid and can be adapted to assess e-commerce activities though emphasis on specific competition issues may change,” the study said.
It cited the example of the acquisition of JobStreet Singapore by Seek Asia Investments, which CCS found to possibly reduce competition giving rise to price increases and exclusive contracts that could harm customers. However, the merger was cleared after behavioural and structural commitments to preserve competition in the online recruitment advertising services market, the study said.
The findings are relevant considering that online commerce is growing locally and there is more room for growth. The CCS study, citing a report by A.T. Kearney and CIMB ASEAN research institute, estimated that online sales account for 4 to 5 per cent of total retail sales in Singapore, while the global average was slightly under 6 per cent.
The Singapore online retail market is also expected to reach S$4.4 billion by the end of the year, four times the market size in 2010, it added.
CCS Chief Executive Toh Han Li said in the press release on Wednesday: “Within CCS, we recognise that a level e-playing field would be essential to encourage and facilitate companies to embark on their e-commerce journeys.
“The findings of the e-commerce research report help CCS better understand the drivers and barriers for e-commerce activities in Singapore. In maintaining a level e-playing field, CCS will continue to closely monitor market developments,” he added.
Source: ChannelsNewsAsia | 2 Dec 2015