SINGAPORE: Two remittance companies have been fined S$5.36 million (US$4.14 million) for exchanging information on the Chinese yuan rate to charge customers.
This went on for six years.
In doing so, the companies - ZGR Global and Hanshan Money Express - were less pressured to offer competitive rates to customers, Singapore's competition watchdog said on Thursday (Jul 31).
The case was uncovered after a member of the public noticed that the two shops in People's Park Complex offered very similar rates and submitted a complaint to the Competition and Consumer Commission of Singapore (CCCS).
The investigation initially looked into a range of currencies before being narrowed down to the Chinese yuan.
ZGR Global, previously known as Zhongguo Remittance, was fined S$2.79 million.
Hanshan Money Express will have to pay S$2.57 million. It received a 10 per cent discount on its penalty because it accepted liability under CCCS' fast track procedure, a streamlined process to resolve cases more efficiently.
This was in addition to a discount given to both companies for cooperating with investigations.
The two companies can appeal against the decision within two months or pay the fine by Oct 1.
CCCS enforces competition and consumer protection laws in Singapore and takes action against unfair trade practices.
Businesses can observe and adapt to their competitors' behaviour, but should not share their pricing strategies or communicate with competitors to influence their conduct, said CCCS chief executive Alvin Koh.
"By colluding together to exchange such information, the parties undermined competition in the market for CNY remittance services, which reduced options for customers," said Mr Koh.
ZGR Global and Hanshan Money Express are leading providers of Chinese yuan remittance services in People's Park Complex. They are direct competitors, noted CCCS.
Before they started sharing information in breach of anti-competition rules, they closely monitored each other's rates, such as by having their staff pose as customers.
To overcome this uncertainty, the businesses started informing each other of their respective opening rates at the start of the day, and would update each other whenever they decided to change their rates during the day.
This behaviour began in 2016, and generally occurred daily. They would communicate the rates being used either verbally over the counter, over the phone or by passing paper slips containing the respective rates.
Messages from ZGR Global's internal WhatsApp group showed photos of paper slips, with captions such as "(These are) Hanshan's rates, (which ZGR Global's) counter has already followed".
Another photo came with the caption "Next door requested to add one tier".
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This went on for six years.
In doing so, the companies - ZGR Global and Hanshan Money Express - were less pressured to offer competitive rates to customers, Singapore's competition watchdog said on Thursday (Jul 31).
The case was uncovered after a member of the public noticed that the two shops in People's Park Complex offered very similar rates and submitted a complaint to the Competition and Consumer Commission of Singapore (CCCS).
The investigation initially looked into a range of currencies before being narrowed down to the Chinese yuan.
ZGR Global, previously known as Zhongguo Remittance, was fined S$2.79 million.
Hanshan Money Express will have to pay S$2.57 million. It received a 10 per cent discount on its penalty because it accepted liability under CCCS' fast track procedure, a streamlined process to resolve cases more efficiently.
This was in addition to a discount given to both companies for cooperating with investigations.
The two companies can appeal against the decision within two months or pay the fine by Oct 1.
CCCS enforces competition and consumer protection laws in Singapore and takes action against unfair trade practices.
Businesses can observe and adapt to their competitors' behaviour, but should not share their pricing strategies or communicate with competitors to influence their conduct, said CCCS chief executive Alvin Koh.
"By colluding together to exchange such information, the parties undermined competition in the market for CNY remittance services, which reduced options for customers," said Mr Koh.
PASSING PAPER SLIPS
ZGR Global and Hanshan Money Express are leading providers of Chinese yuan remittance services in People's Park Complex. They are direct competitors, noted CCCS.
Before they started sharing information in breach of anti-competition rules, they closely monitored each other's rates, such as by having their staff pose as customers.
To overcome this uncertainty, the businesses started informing each other of their respective opening rates at the start of the day, and would update each other whenever they decided to change their rates during the day.
This behaviour began in 2016, and generally occurred daily. They would communicate the rates being used either verbally over the counter, over the phone or by passing paper slips containing the respective rates.
Messages from ZGR Global's internal WhatsApp group showed photos of paper slips, with captions such as "(These are) Hanshan's rates, (which ZGR Global's) counter has already followed".
Another photo came with the caption "Next door requested to add one tier".
Continue reading...