Coach Operators Fined $1.7m for price fixing

Nov 3, 2009 (Straits Times)

By Maria Almenoar

SIXTEEN coach operators and their association have been fined $1.69 million by the Competition Commission of Singapore (CCS) for fixing the prices of express bus tickets to Malaysia.

They were found to have set a minimum price for tickets and agreed on prices for a fuel and insurance charge (FIC) to the tickets between 2006 and June last year.

HOW 17 FIXED PRICES OF COACH TICKETS
Investigations by the Competition Commission of Singapore revealed that the coach operators met regularly with the Express Bus Agencies Association to fix:

• Minimum selling prices of the coach tickets. As a result, these coach operators adjusted ticket prices to either at or above the minimum level, resulting in higher ticket prices

• Fuel and insurance charges (FIC) across the board to mark up ticket prices. The charges were revised upwards on various occasions after they were implemented.

During this period, it is estimated that the coach operators pocketed over $3.65 million from the sale of the FIC. The 17 fined are:

1. Alisan $10,807
2. Express Bus Agencies Association $10,000
3. Enjoy $23,425
4. Five Stars $450,207
5. GR Travel $52,432
6. Grassland $27,706
7. Gunung Raya $76,668
8. Konsortium $337,635
9. Lapan Lapan $10,000
10. Luxury $10,000
11. Nam Ho $10,000
12. Regent Star $103,875
13. Sri Maju $24,600
14. T&L $10,000
15. Transtar $518,167
16. Travelzone $10,000
17. WTS $13,611

These operators represent 60 per cent of the industry and are estimated to have earned $3.65 million from the surcharge imposed.

The penalties ranged from $10,000 to $518,167, with fines corresponding to the size of the companies. The fines were up to 3.85 per cent of the companies' turnover.

Mr Teo Eng Cheong, Chief Executive of CCS, said: 'Our investigations show clearly that the 16 companies and the association colluded to fix prices. Instead of stopping the collusion, the association facilitated the price fixing through its regular meetings and a rebate system to encourage the sale of FIC coupons.

'When faced with cost increases, businesses should aim to improve productivity or innovate so as to maintain their profitability without increasing prices. Instead, these coach operators took the easier path. They colluded to increase prices and passed on their costs to consumers. Consumers therefore bore the brunt of the cost increases.'

Last year, six pest companies were investigated and fined between $4,300 and $92,600 for bid-rigging.

Related links

• CCS Fines 16 Coach Operators and Association $1.69 Million For Price-Fixing
• CCS Fines Pest Control Operators for Bid-Rigging