Singapore Industry Group Investigated for Impeding Innovation and Adoption of Technology

The alleged conduct by SISV included setting rules and byelaws that could restrict price competition and facilitate market-sharing amongst its members. CCCS also considered whether SISV engaged in conduct which could have a dampened the innovation and adoption of technological tools for the provision of property valuation services.

Restrictive Byelaws

CCCS found that SISV's byelaws contained provisions that prohibited members from competing on the basis of fees in order to secure instructions. SISV's byelaws also prohibited members from soliciting or accepting instructions on matters that they could reasonably ascertain as being handled by another SISV member.

Such conduct would be potential breaches of Sections 34 and 47 of Singapore's Competition Act.

Impeding Innovation and Adoption of Technology

There were also concerns that SISV's prior position of not recognising computer-generated valuations may be anti-competitive.

In 2016, SISV was named as a defendant in proceedings brought by StreetSine. StreetSine operates an online platform, which publishes property listings, market intelligence and offers data analytic tools, including an automated valuation service. SISV had released a statement in April 2016 that it did not recognise such computer-generated or automated valuations as they were not in line with SISV valuation standards and practice guidelines. When the statement was released, StreetSine had been in negotiations with a number of banks to join their valuation panels. The banks terminated negotiations shortly after the statement was released and StreetSine reported that its valuation revenue fell sharply following that.

StreetSine alleged that SISV, together with 26 other defendants that included members, council members and disciplinary committee members of SISV, had injured its business and reputation, preventing it from marketing its valuation products to banks, financial institutions or the public in Singapore and overseas.

Such conduct also appeared to be a breach of Section 47 of Singapore's Competition Act which prohibits any conduct that results in the abuse of a dominant position in any market segment. Together with its members, SISV's conduct may have put up barriers to entry by only recognising valuations done by individual Valuers and not recognising computer-generated or automated versions.

In its investigations, CCCS found that there was uncertainty among industry stakeholders about SISV's stance on whether IT and computer modelling could be used in the performance of property valuations.

Conclusion

In December 2019, following mediation and while CCCS investigations were ongoing, SISV amended its byelaws and released a joint statement with StreetSine. In the statement, SISV recognised that automated valuations could contribute to pricing transparency, efficiency and productivity in the profession. SISV also strongly recommended that the profession and industry embrace such technologies. StreetSine recognised that the opinion of a licensed valuer nonetheless remained an important part of the property valuation process and discontinued proceedings against SISV and the other defendants.

CCCS concluded its investigations taking no further action but will continue to monitor the industry and the conduct of the parties. CCCS noted that SISV had addressed the competition concerns by amending its byelaws and taking a position to support the use of technological tools in the performance of property valuations. Furthermore the CCCS stated that with increased competition, firms will be incentivised to become more efficient and innovate, including adopting technological tools, to improve the quality, range and value of their offerings, thereby benefitting both businesses and consumers in the long run.

For more information please contact Sandra Seah and Jonathan Kao.