Competition appeal board upholds financial penalty for IPP

THE appeal of IPP Financial Advisers to seek a substantial reduction in the financial penalty imposed by the Competition Commission of Singapore (CCS) has been dismissed by the Competition Appeal Board (CAB). IPP was ordered to pay the financial penalty of S$239,851 imposed together with interest and costs of the appeal.

Back in March 17, 2016, CCS found that IPP, together with nine other financial advisers, had infringed on the Competition Act by engaging in an anti-competitive agreement to pressurise their competitor, iFAST Financial, to withdraw its offer of a 50 per cent commission rebate on competing life insurance products on the Fundsupermart.com website.

iFAST withdrew the Fundsupermart offer a few days after its launch due to collective pressure from the parties.

IPP had appealed to the CAB, seeking a substantial reduction in the financial penalty imposed by CCS. But after hearing the evidence of IPP's witnesses and the arguments of IPP and CCS, the CAB affirmed the earlier decision and dismissed all of IPP's grounds of appeal. IPP was further ordered to pay CCS's legal costs.

In particular, the CAB found that the object of the infringing conduct was clearly to prevent the entry of a new competitor into the market for individual life insurance products in Singapore, and to prevent the competitor from providing a cheaper alternative product that would affect its own business.

The CAB said that such behaviour is injurious to competition by its very nature as it would result in "the prevention, restriction or distortion of competition in the relevant market".

The CAB noted that the result of the infringing conduct is that "the market never returned to the state of competition that would have existed had the Fundsupermart offer not been withdrawn".