SINGAPORE: Four electronics manufacturers have been fined a record S$19.5 million by the Competition Commission of Singapore (CCS) for engaging in anti-competitive behaviour, including price-fixing.
CCS on Friday (Jan 5) issued an infringement decision against ELNA Electronics, Nichicon, Rubycon Singapore and Singapore Chemi-con, as well as Panasonic Industrial Devices (Singapore and Malaysia).
The first four companies were fined, while Panasonic received immunity under CCS's leniency programme, which encourages cartel members to report colluding behaviour by providing incentives such as total immunity or reduced fines.
CCS said in a media release that these electronic manufacturers had infringed section 34 of the Competition Act after being involved in agreements including price-fixing and the exchange of confidential sales, distribution and pricing information for Aluminium Electrolytic Capacitors (AECs) in relation to Singapore customers.
AECs are electrical components used in electrical devices like computers and domestic appliances.
In its investigations, the competition watchdog found that the parties, who were close competitors, had held meetings where they would exchange confidential and commercially sensitive business information. This would include details such as customer quotations, sales volumes, production capacities, business plans and pricing strategies.
The parties would also discuss sales prices - including various price increases - and would agree to collectively reject customers' requests for price reductions of AECs.
CCS said it started investigating the parties after it received an application for immunity from Panasonic.
CARTEL ACTIVITY BEGAN IN 1997
CCS added that the "cartel activity" started in 1997, with senior level employees from the companies meeting up with "unfailing regularity - almost on a monthly basis up until 2013".
"The long-running cartel sheltered the parties’ profitability and market shares from competition, to the detriment of their customers," said CCS.
CCS noted that without the agreements, the companies would have been under greater competitive pressure and would have to attract customers with better prices or quality of products.
"This means that an individual AEC supplier may not have been able to sustain a price increase without losing market share to its competitors as its customers could switch to another AEC supplier," explained CCS in the media release.
The long-running cartel "committed a serious infringement of the Act" for a protracted period of time, said CCS, adding that that the group was made up of major suppliers of AECs in ASEAN, including Singapore.
The four parties were fined between S$853,227 and S$6 million.
The commission added that it calibrated the penalties based on each firm's turnover, while taking into account aggravating or mitigating factors.
Panasonic received total immunity from financial penalties while ELNA, Rubycon and SCC were also awarded a discount further to their application for leniency as they had come forward to CCS with information on their cartel activities.
CCS said it imposed the record fine because the parties held more than two-thirds of market share for the sale of AECs in Singapore and the long duration of the cartel conduct.