4 hotels fined SG$1.5m by SG competition watchdog for 'anti-competitive' conduct

The Competition and Consumer Commission of Singapore (CCCS) has imposed financial penalties amounting to SG$1,522,354 on four hotels for exchanging commercially sensitive information in connection with the provision of hotel room accommodation in Singapore to corporate customers. CCCS cited the conduct as "anti-competitive" and caused "serious harm" to competition.The four hotels are Capri by Fraser Changi City Singapore, Village Hotel Changi, Village Hotel Katong and Crowne Plaza Changi Airport Hotel. According to CCCS's investigation, the sales representatives of the hotels exchanged commercially sensitive information relating to their corporate customers between 14 January 2014 and 30 June 2015, which might have influenced the hotels' subsequent conduct in the market or placed them in a position of advantage over their corporate customers in contract negotiations. This included critical factors that were taken into consideration in the determination of subsequent prices that were offered by the hotels to their corporate customers.For example, sales representatives from the hotels revealed to one another the corporate room rates that had been negotiated on a confidential basis and agreed upon with specific customers. CCCS added in the press statement that they also discussed future price-related strategies such as their proposed price increases for the following contractual year, their proposed bid prices in response to customer requests, and whether or not they intended to agree to a particular customer’s price reduction request in the course of corporate rate negotiations.Without this exchange, each sales representative would have had to independently determine their conduct on the market, and there would have been more competitive pressure on the rates or terms offered to corporate customers.Capri was fined a total of SG$1,010,451, while Village Hotel Changi and Katong were fined a total of SG$286,610. Meanwhile, Crowne Plaza was fined SG$225,293.CCCS's chief executive Toh Han Li said the exchange of non-public commercially sensitive information between competitors is harmful to competition and customers in the market, as it reduces the competitive pressures faced by competitors in determining their commercial decisions, including the price they will offer to customers."This can result in customers having less competitive prices and options after such exchanges. If a business receives such information from its competitor, it should immediately and clearly distance itself from such conduct and report it to CCCS," Toh added.The hotels were first called out in August last year, and CCCS said in an earlier statement that the moves by the hotels had infringed section 34 of the Competition Act as sharing confidential, customer specific, commercially sensitive information in connection with the provision of hotel room accommodation in Singapore to corporate customers is unlawful. As such, the hotels were issued a proposed infringement decision in the form of a written notice. The notice states the facts and how the CCCS made the assessment before finalising its decision. It also allows the hotel groups to provide any information for CCCS’s consideration at that time.