LawFlash

Caveat Emptor: The New Face of Consumer Protection in Singapore

May 07, 2018

The Competition and Consumer Commission of Singapore’s mandate broadened as of 1 April 2018 to include the administration and enforcement of the Consumer Protection (Fair Trading) Act. With this expanded mandate and increased powers, the commission builds on its capabilities to protect consumers and to ensure that markets work well to create opportunities and choices for consumers and businesses in Singapore. 

The Competition Commission of Singapore was recently renamed the Competition and Consumer Commission of Singapore (Commission). Under its original mandate, the Commission took action against agreements that prevent, restrict, or distort competition; abuses by entities of their dominant positions in the market; and mergers which substantially lessen competition.

While the Commission continues to administer and enforce the Competition Act, it has taken on the added portfolio, from 1 April 2018, of being the administering agency of the Consumer Protection (Fair Trading) Act (CPFTA). In addition, the CPFTA has been amended to give the Commission greater powers, especially in the area of enforcement.

Unfair Trade Practices under Commission’s Purview

The CPFTA protects consumers against unfair trade practices in Singapore. One significant area of unfair trade practice that now falls under the Commission’s purview is false advertising, in which suppliers

  • represent that goods or services have sponsorship, approval, performance characteristics, accessories, ingredients, components, qualities, uses, or benefits that they do not have;
  • represent that goods or services are of a particular standard, quality, grade, style, model, origin, weight, volume, length, capacity, or method of manufacture when they are not; or
  • represent that a price benefit or advantage exists when it does not.

Another category of unfair trade practice under the Commission’s purview is where a seller takes advantage of a consumer by exerting undue pressure or influence on the consumer to enter into a transaction for goods or services.

The Commission works with the Consumers Association of Singapore (CASE) and the Singapore Tourism Board (STB) to assist aggrieved consumers in obtaining redress and, in some cases, compensation. CASE and STB remain the first points of contact for complaints from local consumers and tourists, respectively.

The Commission’s Focus

The Commission will focus on egregious activity rather than routine complaints. It is empowered to act against persistent errant retailers and those who assist or enable them. The Commission can conduct investigations, and its powers include authorising investigation officers to enter into premises without warrants, gathering evidence against persistent errant retailers, and filing and enforcing timely injunction applications against errant retails. The Commission also can take an errant and noncompliant retailer to court for contempt of court and seek a fine and/or imprisonment for the offences.

Failure to cooperate with the Commission is now an offence under the CPFTA. Examples of CPFTA offences include the following:

  • Failure to cooperate or a refusal to provide information
  • Destruction or falsification of documents
  • Providing false or misleading information
  • Obstructing a Commission officer in the performance of duty

Where a CPFTA offence is compoundable, the Commission is empowered to compound each compoundable offence for one-half of the maximum fine prescribed for that offence or $5000, whichever is lower. Although this fine may not appear to be a large sum, we expect that the cumulative effect of multiple violations will be severe, as the Commission will want to deter future or further offences.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Singapore
Daniel Chia
Thenuga Vijakumar