By Ms Kala Anandarajah and Ms Dominique Lombardi


By two decisions dated 28 February 2011 and published on 24 March 2011, the Competition Appeal Board of Singapore ('CAB') substantially reduced the fines imposed on 3 November 2009 on six express bus companies by the Competition Commission of Singapore ('CCS'). Rajah & Tann LLP Competition and Antitrust Practice acted for four of the appellants, namely Konsortium Express & Tours Pte Ltd, Five Stars Tours Pte Ltd, GR Travel Pte Ltd and Gunung Raya Travel Pte Ltd (together, the Appellants). This Update focuses on the decision issued with regards to these four companies.

The four companies had appealed the CCS' decision which found them liable of price-fixing together with 12 other express bus companies and their trade association, EBAA ('Express Bus Agencies Association'), between 2005 and 2007 / 2008. An aggregate fine of almost S$1.7 million was imposed on the 16 bus companies and the EBAA, which is the largest fine imposed by the CCS to date. The combined financial penalties imposed on the Appellants alone accounted for more than half of this amount. Rajah & Tann LLP, who acted in the matter for the Appellants managed to have their fines reduced up to close to 45%.

This Update provides a quick overview of the reasons for the CAB's decision.

Overview Of Facts

The CCS decision involved two anti-competitive agreements, as follows:

  1. First Agreement – Recommended Minimum Selling Price ('MSP')

    The MSP Agreement was an agreement between some of the bus operators only and did not involve EBAA. Here, the CCS found that the relevant bus operators (including the Appellants) reached an agreement on or about 1 June 2005 to not sell their tickets for travel from Singapore to six (6) specific locations in Malaysia below agreed prices.

  2. Second Agreement – Fuel And Insurance Charge ('FIC')

    The FIC Agreement concerned the price of coupons named the FIC that was sold to customers of the bus operators. This coupon originated as an insurance that was purchased by EBAA to cover loss of and damage to baggage of the customers. The coupon was intended as a proof of purchase of insurance, and was sold to customers by members at a flat fee as indicated administratively by EBAA. The flat fee imposed comprised of the cost of the insurance as well as other related operational costs of the bus companies, including an additional fee to defray the cost of rising diesel prices.

The fact of the existence of the two agreements came to light following a report by the Lianhe Zaobao, initiated by the executive council of EBAA in June 2008. Following the publication of this article, the CCS raided the premises of EBAA and four of its office bearers. Various documents and evidence were collected. Subsequently, the CCS also conducted extensive oral interviews with various individuals over several months. In its decision, the CCS found the four (4) appellants liable of both infringements.


  • A lesson reminder here is that the CCS can initiate an investigation into a matter entirely out of its own volition based on information that it finds publicly, without an actual complaint being lodged.
  • A second lesson reminder from this case is that the CCS can and does carry out raids. Hence, businesses and trade associations must be prepared.
  • A third lesson reminder is that the Competition Act applies to SMEs in the same way it applies to large companies, ie SMEs are not 'exempt' in any way from the Competition Act.

The Appeal On The Level Of Penalties

Whilst the Appellants appealed against both their liability and the quantum of the financial penalties imposed on them, the CAB did not overturn the CCS' decision on the findings of liability. The CAB, however, agreed with the Appellants that the fines imposed by the CCS had not been calculated accurately and should, therefore, be reviewed in light of the relevant markets affected by the infringements

Calculation Of Financial Penalties In Antitrust Cases In Singapore

The calculation of the financial penalties in antitrust cases is a complex exercise that takes into account a number of parameters as set out in the CCS Guidelines on the Appropriate Amount of Penalty ('Penalty Guidelines').

Whilst the Competition Act states the maximum financial penalty that can be imposed by the CCS on a party as 10% of the 'turnover of the business of the undertaking in Singapore for each year of infringement for such period, up to a maximum of 3 years', this is merely setting out a ceiling for the fines (albeit a high one).

In practice, however, when calculating the amount of a financial penalty to be imposed, the CCS looks at a number of factors, including, inter alia, the seriousness of the infringement, the duration of the infringement, aggravating factors (such as the role of the undertaking concerned as a leader or the participation of directors or of senior management in the violation) and mitigating factors (such as the cooperation of the undertaking with the investigation or the termination of the infringement as soon as the CCS starts its investigation).

The CCS also takes into consideration the deterrent value of the financial penalty both to the undertakings involved and to the public. This means that when, after the calculation process is completed, the CCS arrives at a penalty which, in its view, will not have a sufficient deterrent value, the CCS has the power to increase the penalty up to the level it finds appropriate. To illustrate the 'minimum' financial penalties imposed by the CCS in this case amounted to S$10,000, ie parties whose penalties – after the calculation process – arrived at less than S$10,000 were nevertheless condemned to pay a financial penalty of S$10,000.

More importantly, when determining the penalty to be imposed, the CCS looks at 'the turnover of the business of the undertaking in Singapore for the relevant product and relevant geographic markets affected by the infringement' ('Relevant Turnover'). This is critical as, depending on the business of the undertaking, the Relevant Turnover can be a small portion only of the undertaking's overall turnover.

In the case, the Appellants contended that, in determining the penalty to be imposed on each of them, the CCS had taken into account the 'wrong' turnover, which lead to an unjustified inflation in the level of the financial penalties applied. The CAB agreed with the parties that, indeed, the CCS had erred in determining the level of the fines imposed on the appellants as those were not calculated based on the Relevant Turnover which had to be determined on the basis of the relevant market.

Review Of The Penalties By The CAB

In its decision, the CCS defined the relevant market as follows:

'89. As a starting point for determining the relevant product market, CCS identified the focal products sold by members of the EBAA, namely:

a) sale of one-way express bus tickets from Singapore to Malacca, Kuala Lumpur ("KL"), Genting, Ipoh, Simpang/Taiping and Butterworth/Penang, where the Minimum Selling Price ("MSP") applies; and

b) sale of express bus or excursion bus services for destinations in Malaysia or Southern Thailand, in the form of either standalone bus tickets or as part of coach package tours, that are sold with fuel and insurance charge ("FIC").

90. Based on the overlapping focal products above, CCS considers that the relevant product market is the sale of express bus or excursion bus services between Singapore and Malaysia or Southern Thailand, sold in Singapore, in the form of either standalone bus tickets or as part of coach package tours'.

The CCS further decided that the geographic scope of this market was Singapore, 'as customers travelling from Singapore to Malaysia and Southern Thailand would typically buy their tickets from Singapore companies that operate express bus or excursion bus services'. On that basis, the CCS decided that the Relevant Turnover for the purpose of determining the penalties of those parties, as the Appellants, who participated both in the MSP Agreement and the FIC Agreement should be 'the turnover obtained in Singapore from the sale of one-way and two-way express bus tickets plus 20% of turnover from sale of coach package tours'.

The appellants contested this approach, essentially with regards to the MSP Agreement. They alleged that the Relevant Turnover as far as the MSP Agreement was concerned could only be derived from the revenue derived by the parties in the relevant market, ie the Relevant Turnover could only comprise the sale of one-way coach tickets on the six (6) routes concerned by the MSP Agreement and should not encompass any other revenue.

On this point, the CAB agreed with the appellants that, in relation to the MSP Agreement, the Relevant Turnover should be limited to the revenue derived from the sale of one-way tickets to the six (6) destinations only.

Some other revisions were also made by the CAB to the way the CCS had calculated the penalties, which further brought down the overall fines imposed on the parties. As a result, the CAB reduced the financial penalties imposed on the Appellants by up to nearly 45%.


The decision issued by the CAB is the first ever appeal decision of a competition case in Singapore. It is, therefore, of great importance as it provides clarification on the way competition law is enforced in Singapore and the principles that apply to both the CCS and the parties when fighting a competition case.

Importantly, the CAB confirms the critical importance of a proper market definition in infringement cases, since this will ultimately impact on the level of the financial penalties that will be imposed on the parties to the infringement.

Email us at if you would like to discuss further or if you have any queries or clarifications. Please feel free to also contact the Knowledge and Risk Management Group at

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.