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Hotels may have infringed Competition Act by exchanging commercially-sensitive information

THE Competition and Consumer Commission of Singapore (CCCS) has issued a Proposed Infringement Decision (PID) against the owners and operators of four hotels for exchanging commercially-sensitive information, giving them six weeks to make representations on the issue.

The parties are the former and current owners of Capri by Fraser Changi City Singapore, respectively Ascendas Frasers and Frasers Hospitality Trustee, as well as operator Frasers Hospitality; the owners of Village Hotel Changi and Village Hotel Katong, respectively Far East Organization Centre and Orchard Mall, as well as operator Far East Hospitality Management; and Crowne Plaza Changi Airport Hotel's owner OUE Airport Hotel and operator Inter-Continental Hotels (Singapore).

The CCCS is proposing that these parties have infringed section 34 of the Competition Act, by entering into agreement(s) and/or concerted practice(s) to discuss and exchange confidential, customer-specific, commercially sensitive information in connection with the provision of hotel accommodation to corporate customers.

The PID, issued on Thursday, sets out the facts which CCCS has taken into account and its reasons for arriving at this proposed decision, and is meant to assist the parties to make representations and provide information for CCCS's consideration. The parties have six weeks to do this, following which CCCS will make its decision.

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An investigation by CCCS, triggered based on its own detection efforts, revealed that sales representatives of Capri and other hotels had discussed and exchanged commercially sensitive information regarding the provision of hotel accommodation to corporate customers. This took place at least from July 3, 2014 to June 30, 2015 between sales representatives of Capri and the two Village Hotels; and separately, at least from Jan 14, 2014 to June 30, 2015 between sales representatives of Capri and Crowne Plaza Changi Airport.

The information shared included non-public bid prices in response to corporate customer requests, as well as price reductions which customers asked for and the hotels' responses during confidential price negotiations.

"The exchange of such commercially sensitive information would reduce the competitive pressure on prices/contract terms offered by competing hotels to their corporate customers," said CCCS.