7.
Unfair Methods of Competition
Introduction
7.1.
Application
7.1.1  All provisions in this section apply to Dominant Facilities-based Licensees. Subsections 7.1-7.1.2 and 7.3-7.4.4 apply to Non-dominant Facilities-based Licensees, Services-based Licensees and Telecommunication Equipment Dealer Licensees. In this section, the term “Licensee” refers to Facilities-based, Services-based and Telecommunications Equipment Dealer Licensees. The term “Dominant Licensee” refers to a Facilities-based Licensee that IDA has classified as dominant.
Over-view
7.1.2  Once a Licensee has complied with the applicable provisions contained in sections 3-6 of this Code, IDA generally will not intervene in a Licensee’s day-to-day operations. However, Licensees must not act in a manner that can impede fair competition. Where this occurs, IDA (either on its own motion or at the request of a private party) may initiate an enforcement action, pursuant to the procedures set forth in section 10 of this Code. This section provides standards that IDA will use to determine whether a Licensee has contravened this Code by acting anti-competitively.
Abuse of Dominant Position in the Singapore Market
7.2.A Dominant Licensee must not use its position in the Singapore telecommunication market in a manner that unreasonably restricts competition. This section provides examples of some of the ways in which a Dominant Licensee can seek to abuse its dominant position.
Pricing Abuses
7.2.1  A Dominant Licensee must not price services in a manner that is likely to unreasonably restrict competition. In particular, a Dominant Licensee must not engage in the following types of anti-competitive pricing:
Predatory Prices
(7.2.1.1)Whilst vigorous price competition is the hallmark of a competitive market, a Dominant Licensee must not engage in anti-competitive predatory price-cutting. IDA will find that a price cut is predatory if 3 factors are met. First, the Dominant Licensee is selling its service at a price that is less than marginal cost. Second, there is likelihood that such price cutting will drive efficient rivals from the market or deter future efficient rivals from entering the market. Finally, entry barriers are so significant that, after driving rivals from the market or deterring entry, the Licensee could impose an increase in prices sufficient (in amount and duration) to enable the Dominant Licensee to recoup the full amount of the loss that it incurred during the period of price cutting.
Price Squeezes
(7.2.1.2)A Dominant Licensee that provides an input used by “down-stream” entities, including an affiliate of the Licensee, must not provide the input at a price that is so high that the Licensee’s down-stream affiliate could not profitably sell its product if it were required to pass on to its customers the full retail price of the input. Similarly, a Licensee that uses an input provided by an upstream affiliate that has market power in the upstream market (i.e., the ability to profitably restrict output and/or charge prices that are above competitive levels) may not obtain the input at a price that is so high that efficient competing non-affiliated Licensees could not profitably sell their end-product if they were required to purchase the input at the same price as the Licensee.
Cross-subsidisation
(7.2.1.3)A Dominant Licensee must not use revenues from the provision of a tariffed telecommunication service to cross-subsidise the price of other telecommunication services and equipment. To prevent such abuse, Dominant Licensees must comply with separate regulations and guidelines issued by IDA requiring accounting separation, the correct allocation of costs between competitive and non-competitive operations, and the use of arm’s length transactions between competitive and non-competitive operations. Similarly, a Licensee that is affiliated with an entity that has market power may not accept any cross-subsidisation from that affiliate.
Other Abuses
7.2.2  A Dominant Licensee is also precluded from abusing its position by means other than anti-competitive prices. In particular, a Dominant Licensee may not engage in the following practices:
Discrimination
(7.2.2.1)A Dominant Licensee must not provide its down-stream affiliates with access to infrastructure, systems, services, or information on prices, terms or conditions that are more favourable than the prices, terms and conditions on which the Licensee provides those infrastructures, services or information to non-affiliated competitors of its “down-stream” affiliate. Similarly, a Licensee that is affiliated with an entity that controls infrastructure, systems, services or information that, as a practical matter, is necessary to provide downstream services, may not accept access to the infrastructure, systems, services or information unless the affiliate offers to the Licensee’s competitors access to those infrastructure, systems, services or information on non-discriminatory price, terms and conditions.
Predatory Network Alteration
(7.2.2.2)A Dominant Licensee may not alter the physical or logical interfaces of its network in a manner that imposes significant costs on interconnected Licensees, in the absence of a legitimate business, operational or technical justification.
Abuse of Market Dominance in a Foreign Market
7.3.A Licensee may be classified as non-dominant in the Singapore telecommunication market even though it is affiliated with a telecommunication operator or other entity that has market power in a foreign market. Such a Licensee, however, must not use the market position of its foreign affiliate in a manner that enables it to unreasonably restrict competition in the Singapore telecommunication market.
Unfair Methods of Competition
7.4.Whilst Licensees are expected to compete vigorously against their rivals, Licensees must not engage in unfair methods of competition. An unfair method of competition is a practice that improperly deters (or is likely to deter) new entry into the Singapore telecommunication market, or restricts (or is likely to restrict) existing competition in the Singapore telecommunication market, for reasons unrelated to the availability, price or quality of the service that a prospective or current Licensee offers or seeks to offer. In particular, a Licensee may not engage in the following unfair methods of competition:
False or Misleading Claims
7.4.1  A Licensee must not make any claim or suggestion regarding the availability, price or quality of its telecommunication service or equipment, or of the telecommunication service or equipment of another Licensee, that is not supported by objective evidence or that is reasonably likely to confuse or mislead End Users.
Degradation of Service Availability or Quality
7.4.2  A Licensee must not take any action, or induce any other party to take any action, that has the effect of degrading the availability or quality of another Licensee’s telecommunication service or equipment, or raising the other Licensee’s costs, without a legitimate business, operational or technical justification.
Provision of False or Misleading Information to Competitors
7.4.3  Whilst Licensees are not required to disclose proprietary or commercially sensitive information to their competitors, a Licensee shall not provide information to other Licensees that is false or misleading.
Interference with End User or Supplier Relationships
7.4.4  A Licensee must not seek to induce an End User or supplier to cease doing business with a Licensee providing competing telecommunication services or equipment by providing false or misleading information to the End User or supplier.