Langkawi Ro-Ro ferry services cartel fined RM2.2 million for price fixing
The MyCC issued an infringement decision against the enterprises for forming a price-fixing cartel to increase fares for vehicle transportation via Ro-Ro vessels between Langkawi and Kuala Perlis, and vice versa.
The MyCC's investigations into the cartel were launched following reports that higher prices in Langkawi (as compared to mainland Kedah) were primarily driven by the cost of transportation. It was found that two memorandums of understanding were signed in 2018 and 2019 respectively between the enterprises to align fares.
The MyCC clarified that it takes a similar view to the EU position that a "single economic unit" (SEU) can exist outside of a parent-subsidiary relationship. In this instance, the MyCC considered two of the five enterprises to be a SEU (notwithstanding neither enterprise holds shares in the other enterprise) on the basis that, among others, (i) the enterprises share a common majority shareholder and ultimate decision maker, and (ii) the CEO of one enterprise is a director of the other enterprise.
While the MyCC's CEO took the opportunity to express the MyCC's strong stance against cartels and labelled cartels as "the supreme evil of competition law", the MyCC notably granted its largest ever percentage reduction of 50% on the financial penalty imposed to account for the impact arising from Covid-19 on the enterprises.
In addition to the fine, the MyCC prohibited the enterprises from implementing the agreed charges for the provision of vehicle transportation via Ro-Ro vessels in Langkawi, and to independently determine future charges for such services.
MyCC's conducts market review on port logistics ecosystems and motor vehicle warranties
On 5 October 2021, the Malaysia Competition Commission (MyCC) published its Market Review Report On Selected Areas Of The Transportation Sector (Port Logistics Ecosystem & Motor Vehicle Warranty Claims).
The Report has made a number of notable recommendations to address possible anti-competitive conduct in the port logistics industry, which include the MyCC to invoke its enforcement power to determine whether there are cartels concerning the landside charges, shipping liner charges, depot gate charges and fuel adjustment factor.
In respect of motor vehicle warranty claims, the MyCC found that warranty restrictions imposed by auto manufacturers restricted competition in the auto repair and service industry as independent repairers likely faced barriers which prevented them from servicing/repairing new auto vehicles that were still under warranty. In the Report, the MyCC encourages auto manufacturers to remove such restrictions. This recommendation is aligned with antitrust laws in the European Union, which essentially prohibit warranties from being conditional on repair and servicing of vehicles within an authorized network. The laws also mandate auto manufacturers to allow independent repairers to have access to technical information related to vehicles. This allows consumers to have greater choice when repairing or servicing their vehicles.
The MyCC's recommendations in the Report recognize the importance of liberalizing the aftermarket, however further clarification is still required on the scope of the recommendations (for example, whether auto manufacturers can legitimately refuse to honor warranties where the claim is linked to a failure of a specific spare part or repair provided by the independent supplier).
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