A suggestion to Competition Commission Singapore (CCS)

A number of sectors (Petrol, Telco, Taxi etc) have price movements that are extremely highly correlated in terms of timing of price change. I.e. they change the prices at almost the same time (Think petrol prices).

They are able to do this because of the implicit understanding amongst the industry players not to rock the boat, i.e. the best strategy is to synchronize the price changes and avert a price war. All this can be done without meeting together to decide on a unified response (which is a crime). This behavior hurts consumer.

I have a suggestion to CCS. Implement a scheme whereby if one of the players were to change their price, there will be an automatic freezing of the competitors price change. This is to intentional create discord amongst the players so that the risk of a price change is magnified (i.e. losing market share).

Take the petrol station as an example. There are 4 companies – Esso, Shell, Caltex, SPC. If say Esso were to raise price, there will be an automatic price freeze of say 1 week on the other 3 companies. Raising the price before that is deemed collusion. The 1 week prize freeze will raise the risk of Esso as it stands to lose market share for that week. Conversely, if Esso were to lower the petrol price, the other 3 may not follow suit for a week. Esso will then gain the market share.

This measure deliberately creates discord amongst the players and spurs competition, helping consumers to achieve lower price in the process.