The Malaysia Competition Commission (MyCC) imposes financial penalties ranging from RM26,363.03 to as high as RM336,369.13 against seven (7) 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-
- SAL Agencies Sdn. Bhd.
- WCS Warehousing Sdn. Bhd.
- Regional Synergy (M) Sdn. Bhd.
- Intrexim Sdn. Bhd.
- Pioneerpac Sdn. Bhd.
- Prima Warehousing Sdn. Bhd.
- Interocean Warehousing Services Sdn. Bhd.
Collectively, the grand total amount of penalty is RM1,043,012.52. 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 unveiled the operators’ cartel agreement in the form of a document called ‘Surcharge Memorandum’ dated 22 May 2017. In that memorandum, all operators have come to an understanding that all of them would charge the agreed rates effective from 1 June 2017.
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, cartel is the supreme evil of competition law. All competition agencies in the world has the same view including MyCC. 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,” said Iskandar Ismail, the Chief Executive Officer of MyCC.
“This case should send a clear message to all industry players that, MyCC will leave no stones left unturned, in fighting the economy sabotage by the cartels against our open market economy. They should steer clear of such practices. As for those who are already involved in a cartel, should approach the MyCC via leniency regime application or any other appropriate scheme as provided under Competiton Act 2010. MyCC’s door is always opened for parties who may want to seek for redemption” emphasises Iskandar.
In the decision, MyCC also directs the companies to cease and to refrain in the future from engaging in price-fixing agreements 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.
The decision has been made available for public viewing on the MyCC’s website at www.mycc.gov.my.