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16 maid agencies fined for price fixing
By Joanne Chan | Posted: 30 September 2011 1229 hrs
SINGAPORE: Sixteen employment agencies in Singapore have been fined S$152,563 for price fixing.
They were charged with attempting to collectively raise the monthly salaries of new Indonesian maids - from S$380 to S$450.
Faced with a dwindling supply of Indonesian maids due to competition from Hong Kong and Taiwan, the maid agencies felt it was necessary to raise salaries in Singapore to remain attractive.
But by agreeing to act collectively, the agencies were found guilty of collusion.
"Competitors should be individually deciding their own prices. They should not be coming together to discuss prices, especially future pricing conduct," said Toh Han Li, assistant chief executive of the Competition Commission of Singapore (CCS).
The agencies were fined between S$5,000 and S$42,000 each, based on the company's annual income.
The CCS said the fines amounted to not more than one per cent of each company's annual turnover.
But a mitigating factor was that the collusion was discovered early and agencies did not have long to act on it.
The CCS launched investigations after media reports surfaced of the meeting between the 16 agencies at Keppel Club on January 16 this year.
Nation Employment received the highest penalty (S$42,317) as it was also found to have been an instigator of the discussions.
Some agencies argued that they didn't benefit from the agreement as they had not raised fees. But the CCS said that as they had not publicly distanced themselves from the agreement, these agencies had also broken the law.
"When you agree on pricing, or discuss pricing, the competitive process is impaired. So it doesn't matter if you subsequently implement it, or whether you benefit from it," said Mr Toh.
"One way would be to tell the group 'I'm not being involved in this conduct, it's illegal', and they could report it to the CCS."
The maid agencies said they didn't know they had broken the law.
"We always regard price as the price we charge the employer. So in this aspect, we did not touch on this issue. However, we did not know that fixing the salary and trying to reduce the loan of the domestic helper has already infringed the anti-competition act," said Tay Khoon Beng, managing director of Best Home Employment.
Nation Employment declined to comment, and only said it was never its intention to collude.
The agencies have signed written assurances that they would not engage in collusion again.
- CNA/ck/cc
