Seek commits to capping pricing and non-exclusive agreements to appease competition watchdog

PETALING JAYA: The Competition Commission of Singapore (CCS) has commenced market consultation on the proposed commitments offered by Seek Ltd and Seek Asia Investments Pte Ltd (collectively known as Seek) to address competition concerns which has blocked the authorities' approval of its proposed acquisition.
CCS said in a statement yesterday that the proposed commitments are that Seek will not enter in exclusive agreements with employer and recruiter customers.
"By deterring exclusivity, the proposed commitments aim to retain the current practice of multi-homing by employers and recruiters, as well as jobseekers. It further aims to keep barriers to entry and expansion low, and preserve competition in the market for online recruitment advertising services," it said.
Seek also committs to maintain current pricing of its services capped at present day rate cards or current day negotiated prices, subject to consumer price index variations.
Capping pricing at current levels, hopes to address concerns identified by market participants during the Phase 1 and 2 reviews that the closeness of competition between JobsDB Singapore and JobStreet.com Pte. Ltd. (JobStreet Singapore) is likely to cause prices to rise post-merger.
The term of the commitments will be for three years from the date of completion of the proposed acquisition.
"CCS now seeks views from market participants to assist its consideration of the proposed commitments and its determination of whether the proposed commitments would be likely to address the potential competition concerns arising from the proposed acquisition," it said.
Following the market consultation which will continue until Sept 5, 2014, CCS will decide on their acceptance or rejection of the proposed commitments.
CCS first received a merger notification for decision on Feb 20, 2014 on the proposed acquisition by Seek of 100% of the issued share capital in certain recruitment business assets of the JobStreet Corp Bhd, including JobStreet Singapore.
The proposed acquisition will combine the two main online recruitment advertising service providers in Singapore, namely the JobsDB.com.sg and Jobstreet.com.sg platforms, each with a substantial employer/recruiter customer base and jobseeker database.
CCS completed the Phase 1 review of the notification in April 2014 but was unable to conclude that the proposed acquisition would not raise competition concerns, based on information furnished during the Phase 1 review.
JobStreet Corp and JobStreet Singapore filed Form M2 on May 12, 2014, after which the proposed acquisition proceeded to a Phase 2 review, which entails a more detailed and extensive examination of the merger situation.