SINGAPORE Law and Practice Contributed by: Lim Chong Kin and Corinne Chew, Drew & Napier LLC
49% of its shares/its holding company’s shares, or where a foreign source is in a position to appoint a majority of persons with direction, control or management of the company or where such persons are under an obligation to act in accordance with the direc - tions, instructions or wishes of any foreign source, without the Minister for Digital Devel - opment and Information’s approval. 4.7 Special Consideration for Joint Ventures The same substantive assessment applies to a joint venture that is deemed to constitute a merger for the purposes of the Competition Act. As the creation of a joint venture merger may increase the probability of co-ordination between the joint venture parent entities in some cases, the Commission will assess any co-ordination that takes place outside of the approved joint venture with a view to establishing whether the behaviour poses competition concerns. 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions Where the Commission makes a decision that a merger has infringed the Section 54 Prohibition, or that an anticipated merger will infringe the Section 54 Prohibition if it is carried into effect, it may give such directions as it thinks appropriate. The directions may include provisions prohibit - ing an anticipated merger from being brought into effect or requiring a merger to be dissolved or modified in such a manner as the Commission may direct (eg, requiring the disposal of such operations, assets or shares of such undertaking in a manner specified).
The Commission may also require merger par - ties that intentionally or negligently infringe the Section 54 Prohibition to pay a financial penalty, determined by the Commission, of up to 10% of each party’s turnover in Singapore for each year of infringement, up to a maximum of three years. 5.2 Parties’ Ability to Negotiate Remedies Generally, merger parties are encouraged to take the initiative to propose appropriate com - mitments to remedy, mitigate or prevent any competition concerns at any time before the Commission decides on the merger. The Com - mission will only accept commitments that are proportionate and sufficient to clearly address the identified adverse effects on competition. Even if merger parties propose commitments, the Commission may consider and impose alter - native remedies. The Commission may consider two types of remedies: structural remedies and behavioural remedies. These are generally preferred over financial penalties to restore competitive condi - tions in the market, although financial penalties may be imposed to reflect serious infringements and deter future infringements. Structural Remedies Of the two types of remedies, structural rem - edies are generally preferred to behavioural rem - edies because they clearly address the market structure issues that gave rise to the competition problems and, once implemented, require little ongoing monitoring by the Commission. Typi - cally, structural remedies involve the sale of one of the overlapping businesses that led to the competition concern. The Commission consid - ers that, ideally, this should be a self-standing business that is capable of being fully separated
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