Competition watchdog accepts commitments by HDB lift parts suppliers after public consultations

Competition watchdog accepts commitments by HDB lift parts suppliers after public consultations

SINGAPORE: The Competition Commission of Singapore (CCS) has accepted commitments by two lift parts suppliers - BNF Engineering (BNF) and C&W Services Operations (CWO) - to sell lift spare parts to third-party lift maintenance contractors. 

CCS has been investigating alleged refusals by companies to supply lift spare parts for the maintenance of lifts in HDB estates.

In a media release on Wednesday (Mar 28), CCS said there are typically multiple brands of lifts installed in each HDB estate. 

For lift maintenance, town councils can either appoint the companies that originally installed the lifts or engage contractors to provide lift maintenance services for multiple brands within the estate.

There could be cost savings in engaging a contractor for multiple brands as compared to having to procure lift maintenance services from each original lift installer, the competition watchdog noted. 

According to CCS, contractors bidding for lift maintenance projects that include multiple  brands would require brand-specific spare parts. 

However, if a company or distributor does not provide proprietary but essential spare parts to contractors, they may be prevented from effectively competing for contracts to maintain and service lifts of that particular brand.

To address CCS' competition concerns, BNF and CWO had separately proposed voluntary commitments to CCS relating to the supply of parts to contractors. 

Public consultations were held over the commitments last November, with queries raised including the ability of contractors to properly use the lift spare parts, the size of inventories that BNF and CWO should hold to supply third-party maintenance contractors and the protection of intellectual property rights. 

Following the consultations, BNF and CWO amended and finalised their commitments undertaking to sell lift spare parts of the relevant brands to a purchaser  on a fair, reasonable and non-discriminatory basis, subject to certain terms and conditions. 

The final voluntary commitments provided by the two companies "fully address" the competition concerns raised by CCS in relation to the supply of their respective brand of lift spare parts, according to the competition watchdog.

"CCS notes that lift owners should continue to exercise due care that the lift maintenance contractors they engage are properly trained and competent, and it would also be prudent for lift owners to ensure that their appointed lift maintenance contractors maintain sufficient inventories of spare parts to service and maintain the lifts," it said in the media release. 

"CCS also notes that competition law does not prevent the proper exercise of intellectual property rights. However, competition concerns may arise where a dominant firm attempts to extend its market power into a related market, beyond the scope granted by intellectual property laws."

The competition watchdog said it will continue its other investigations regarding access to essential lift spare parts for third-party lift maintenance contractors.

Lift maintenance has become an issue in recent years after a number of breakdowns and accidents hit the headlines, with recent cases including an elderly couple trapped for more than two hours in a lift at an HDB block in Yishun on New Year's Day this year and a lift in Jurong West that was closed for at least two months after it fell from the 4th floor, injuring a woman last July. 

Frequent lift breakdowns reported in Punggol West also prompted Member of Parliament Sun Xueling to urge HDB to take tougher action against the lift contractor, while the People’s Action Party (PAP) announced a centralised system to monitor lift and contractor performance across all 15 PAP town councils last January. 

Source: CNA/mz(db)