SINGAPORE Law and Practice Contributed by: Lim Chong Kin and Corinne Chew, Drew & Napier LLC
The Commission may “stop the clock” and there - by extend the relevant time period for assessing the merger. If the applicant fails to provide the additional information within the deadline and any time extensions that have been granted, the Commission has the power to determine the application by not giving a decision, and then commence its own investigation into the merger using its statutory powers. 3.11 Accelerated Procedure No separate accelerated review procedure is currently available. However, Phase 1 is gener - ally considered a quick assessment that allows the Commission to issue a favourable decision in the case of a merger that is unlikely to raise any competition concerns. The Commission employs the SLC test in assessing mergers. There is no precise thresh - old as to what constitutes an SLC. In applying the SLC test, the Commission will compare the likely state of competition in the scenario where the merger has proceeded against the scenario where the merger has not proceeded (often referred to as the “counterfactual”). The counterfactual should not involve a violation of competition law. 4. Substance of the Review 4.1 Substantive Test Typically, the appropriate counterfactual will be the prevailing conditions of competition as this may be indicative of future competition in the market without the merger. However, in certain circumstances, the Commission may take into account likely and imminent changes to the structure of competition to accurately reflect competition in the market without the merger – eg, where one of the parties is genuinely fail -
ing, also known as the failing firm defence. To qualify for the failing firm defence, the merger party must be able to show that it is in such a dire situation that, without the merger, it would exit the market or be unable to meet its financial obligations, and that there is no less anti-com - petitive alternative to the merger. 4.2 Markets Affected by a Transaction As noted in 2.5 Jurisdictional Thresholds , the Commission will seek to define the relevant market(s), in order to assess the extent of com - petition in each relevant market both with and without the merger. However, as market shares alone do not provide deep insight into the nature of competition between firms in a market, an SLC could potentially be established at thresh - olds below those set out in 2.5 Jurisdictional Thresholds , if other relevant factors provide strong evidence of an SLC. 4.3 Reliance on Case Law While market definition depends on the specific facts and circumstances of the particular merger under assessment or investigation, the Commis - sion may be guided by market definitions from other jurisdictions if such definitions are relevant, In assessing whether a merger situation might have the effect of an SLC in the relevant market, the Commission will look at: • the extent to which the merger parties are close competitors; • competition from existing competitors operat - ing in the relevant market; • competition from potential competitors; and • the degree of countervailing buyer power of customers, such that some or all customers based on the facts of the case. 4.4 Competition Concerns
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