4 hotels fined US $ 1.5 million for the exchange of commercially sensitive data: Competition Observatory



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SINGAPORE: Sales representatives from four hotels in Singapore have shared commercially sensitive information from their corporate customers for a year or more, causing "serious damage to competition" in the industry.

For such practices, the Singaporean Competition and Consumer Commission (CCCS) said on Wednesday (January 30) that it imposed infringement penalties of more than $ 1.5 million in total on hotels. These are Capri by Fraser Changi City Singapore, Changi Village Hotel, Katong Hotel Villa and Crowne Plaza Changi Airport Hotel, according to their press release.

CCCS chief executive Toh Han Li told reporters in a statement the same day that research on hotels sharing confidential information was initiated internally and initially covered more than 30 hotels.

Over time, however, the competition watchdog found that most interactions of hotel employees were just informal conversation, he added.

They zoomed into the four hotels and carried out attacks as part of their investigations in 2015, before narrowing the focus to the two infractions cited here in June 2016.

Through its investigations, CCCS found that hotel sales representatives exchanged information that "probably influenced the future conduct of each in the marketplace or put them in an advantageous position over their customers in contract negotiations."

The industry's common practice was for corporate customers to establish a preferred hotel list for preferential rates and fixed rates of, say, one year. The hotels at their end would compete for being on the list of preferred hotels, then compete for real room bookings throughout the term of the contract, the agency explained.

"SERIOUS DAMAGE TO COMPETITION"

However, sales representatives from the four hotels shared information that put them in a beneficial position when negotiating with these corporate customers.

For example, sales representatives from Capri and Village Hotel shared the details of the renegotiation of the contract between a common corporate customer in Standard Chartered Bank, the CCCS revealed.

According to a WhatsApp chat log on November 3, 2014, the watch dog had obtained, a Village Hotel representative asked the Capri counterpart: "You can check with how many percent the renegotiation of your offered rate by SCB? "

In response, the Capri rep said: "All I can say is that they are asking for lower rates than this year"

"The same here"

"He asks (written)% reduction"

"You can tell me in percentage or not"

The same

whatsapp capri v hotel reps

(Source: Singaporean Competition and Consumer Commission)

whatsapp capri v chat reps from square crowne

(Source: Singaporean Competition and Consumer Commission)

CCCS said sales representatives tended to interact frequently, especially during times when customers were looking to hire or hire new hotels. The two identified infractions involved Capri and Village Hotels from 3 July 2014 to 30 June 2015 and Capri and Crowne Plaza from 14 January 2014 to 30 June 2015.

"Both were by their nature harmful to the smooth functioning of normal competition and caused serious damage to competition in Singapore," the agency said.

"Without (contact), each sales representative would have to determine their conduct in the market independently. This would likely result in more competitive rates and / or terms offered to corporate customers. "

As a result, the CCCS imposed financial penalties on both the owner and operator of the four hotels, with Capri receiving the greatest impact. The discrimination of penalties is:

CAPRI – S $ 793,925

Ascendants Frasers, owner until March 30, 2015

Frasers Hospitality, hotel management and operation agent

CAPRI – $ 216,526

Administrator of Frasers Hospitality, owner as of March 31, 2015

Frasers Hospitality

VILA HOTELS – $ 286,610

Far East Organization Center, owner of Village Hotel Changi

Orchard Mall, owner of Village Hotel Katong

Far East Hospitality Management, hotel management and operation agent

CROWNE PLAZA – $ 225,293

OUE Airport Hotel, owner

Inter-Continental Hotels (Singapore), hotel management and operation agent

The CCCS noted that, in imposing penalties, it took into account, among other factors, whether companies had signed up for their Leniency Program, which encourages companies involved in secret cartel activities to speak out.

OUE Airport Hotel requested the indulgence on July 21, 2015, while the owners and agent of Village Hotels did the same on April 18, 2016, he said. Capri did not apply.

Mr. Toh said that this is not the first time that CCCS has taken action against companies sharing commercially sensitive information, but the latter decision is the first for the hotel industry.

"We wanted to signal that certain types of (business) practices are not acceptable," he said of the decision, adding that sales representatives should be more aware that information sharing for certain situations "could be a problem" .

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