Section 47 prohibits commercial conduct on the part of one or more organizations which amounts to the abuse of a dominant position in any market in Singapore.

There is a two-step test to assess whether the section 47 prohibition applies:

·         Whether an undertaking is dominant in a relevant market, either in Singapore or elsewhere; and

·         If it is, whether it is abusing that dominant position in a market in Singapore.

Market Definition

To assess whether an undertaking is dominant, the relevant market (please refer to CCS Guidelines on Market Definition) must be determined. The relevant market will have two dimensions:

·         The relevant product (‘the product market’); and

·         The geographic scope of the market (‘the geographic market’).

Assessing Dominance

An undertaking will not be deemed dominant unless it has substantial market power. Market power arises where an undertaking does not face sufficiently strong competitive pressure and can be thought of as the ability to profitably sustain prices above competitive levels or to restrict output or quality below competitive levels. An undertaking with market power might also have the ability and incentive to harm the process of competition in other ways, for example by weakening existing competition, raising entry barriers or slowing innovation. Both buyers and sellers can have market power. 

In assessing whether an undertaking is dominant, the extent to which there are constraints on an undertaking’s ability to profitably sustain prices above competitive levels will be considered. Such constraints include:

·         Existing competitors: This refers to competition from undertakings already in the relevant market, to whom buyers might switch if the alleged dominant undertaking sustained prices above competitive levels. The market shares of competitors in the relevant market are one measure of the competitive constraints from existing competitors;

·         Potential competitors: This refers to the possibility that undertakings will enter the relevant market and gain market share at the expense of an alleged dominant undertaking seeking to sustain prices above competitive levels. The strength of potential competition is affected by barriers to entry;

·         Other factors, such as the existence of powerful buyers and economic regulation.

Abuse of a dominant position

Where it is established that an undertaking is dominant in the relevant market, the second part of the test is to assess whether the undertaking’s behaviour might be regarded as an abuse of its dominant position. The conduct of a dominant undertaking has the potential to significantly impact competitive conditions in Singapore. However, where a dominant position is achieved or maintained through conduct arising from efficiencies, such as through successful innovation or economies of scale or scope, such conduct will not be regarded as an abuse of dominance. Section 47(2) of the Act lists broad categories of business behaviour within which particular examples of abusive conduct are most likely found.  

Exclusionary behaviour may include excessively low prices, certain discount schemes, refusals to supply, or vertical restraints, which foreclose (or are likely to foreclose) markets or weaken competition. However, the likely effect of each particular kind of behaviour will be assessed on the particular facts of each case.

Some examples of conduct that may be caught by section 47:

·        Predatory pricing; and 

·        Refusal to supply an existing customer.

For more information on section 47 prohibitions, and what may constitute a breach of this prohibition, refer to the CCS Guidelines on the Section 47 Prohibition .

Please access "Introduction to Complaints" for information on how to lodge a complaint.