THE Malaysia Competition Commission (MyCC) has imposed financial penalties ranging from RM26,363.03 to as high as RM336,369.13 against seven warehouse operators for engaging in a price-fixing cartel in relation to the handling services for long length and heavy lift of import and export cargoes at Port Klang.
The said warehouse operators are (i) SAL Agencies Sdn Bhd; (ii) WCS Warehousing Sdn Bhd; (iii) Regional Synergy (M) Sdn Bhd; (iv) Intrexim Sdn Bhd; (v) Pioneerpac Sdn Bhd; (vi) Prima Warehousing Sdn Bhd; and (vii) Interocean Warehousing Services Sdn Bhd.
Collectively, the grand total amount of penalty is RM1.04 mil. The amount respectively imposed on the warehouse operators are not more than 10% of their worldwide turnover.
In the process of determining the penalty, MyCC has considered the impact of the current economic situation together with the presence of mitigation and aggravating factors in the case.
MyCC found in its investigation that between May 2017 and December 2019, the seven operators had formed a cartel and thereafter colluded in fixing the surcharges for the handling service of long length and heavy lift cargoes between themselves.
At the time of MyCC raids against the operators, it was uncovered that the operators had created a WhatsApp group and began their discussion on fixing the surcharges despite acknowledging that they are all competitors in the warehouse services market.
The same raid also unearthed the operators’ cartel agreement in the form of a document called ‘Surcharge Memorandum’ dated May 22, 2017 in which all of them have come to an understanding to impose the agreed rates with effect from June 1, 2017.
In the decision, MyCC also directs the companies to cease and refrain from engaging in price-fixing agreements in the future that may disrupt competition in the handling of long length and heavy lift of import and export cargoes.
The MyCC further directs the parties to independently determine their future charges for long length and heavy lift of import and export cargoes.
Lesson to all
The parties had submitted their representation between December 2020 and March 2021 to MyCC. After careful deliberation, MyCC had concluded that, without doubt, the conducts of all the warehouse operators constitutes an infringement under Section 4 of the Competition Act 2010.
“In any rate, a cartel is the supreme evil of competition law. All competition agencies in the world has the same view including MyCC,” commented MyCC’s CEO Iskandar Ismail in a statement.
“As such, MyCC has always given high priority to the investigation and punishment of anti-competitive agreements, especially price and quota cartels, customer or territorial allocation agreements and bid rigging too.
“The perpetrators of these cartels, quite literally, are stealing money from the pocket of businesses and consumers.”
Iskandar expects the said case to send a clear message to all industry players that MyCC will leave no stones left unturned in fighting the economy sabotage by cartels against the open market economy.
“As for those who are already involved in a cartel, they should approach the MyCC via leniency regime application or any other appropriate scheme as provided under Competition Act 2010,” advised Iskandar. “MyCC’s door is always opened for parties who may want to seek for redemption.”
Established in June 2011, MyCC is an independent body responsible for enforcing the Competition Act 2010 which was implemented to create healthy competition which would in turn stimulate productivity and innovation by creating wider choices of products for consumers with better quality and reasonable prices. – Aug 9, 2021
