4 April, 2014
On 20 February 2014, the Malaysia Competition Commission (“MyCC”) issued a proposed decision against 26 ice manufacturers for infringing section 4(2)(a) of the Competition Act 2010 by entering into an agreement that has as its object to fix, directly or indirectly, the selling price of edible tube ice and the price of block ice in Kuala Lumpur, Selangor and Putrajaya.
This latest proposed decision follows earlier proposed decisions by MyCC against the Cameron Highlands Floriculturist Association for engaging in an anti-competitive agreement to raise the prices of flowers by 10%, Megasteel Steel Sdn Bhd for abusing its dominant position in the Hot Rolled Coil market and engaging in a margin squeeze of its competitors in the downstream market, and Malaysian Airline System Berhad and AirAsia Berhad for entering into an agreement to share markets in the air transport services sector.
The proposed decision in respect of the alleged ice cartel follows interim measures issued to the 26 ice manufacturers by MyCC on 20 January 2014. MyCC’s investigation into the alleged ice cartel was triggered by the ice manufacturers’ announcement of their plan on 24 December 2013 to increase the price of edible tube ice by RM 0.50 (SGD 0.19) per bag and the price of block ice by RM 2.50 (SGD 0.96) per big block starting 1 January 2014.
The total amount of proposed financial penalties to be imposed on all the enterprises involved is RM 283,600 (SGD 108,810), with each enterprise facing a fine ranging from RM 1,200 (SGD 460) to RM 106,000 (SGD 40,670). In determining the quantum of the financial penalty, MyCC took into account several factors including the seriousness of the infringement, the duration of the infringement, and the level of cooperation during the investigation process. The maximum amount of financial penalties MyCC can impose must not exceed 10% of the worldwide turnover of the enterprise during the period the infringement occurred.
The parties have 30 days from the date of the proposed decision to submit written representations to MyCC or indicate whether they wish to make oral representations before MyCC.
In Singapore
Agreements between competitors to fix prices would be caught under section 34 of the Singapore Competition Act (Cap. 50B) which prohibits agreements between undertakings which have as their object or effect the prevention, restriction or distortion of competition within Singapore. However, the Competition Commission of Singapore would typically only publish the level of financial penalties in its finalised infringement decisions.
For further information, please contact:
Cavinder Bull, Drew & Napier
Lim Chong Kin, Drew & Napier
Scott Clements, Drew & Napier
Ng Ee Kia, Drew & Napier