NATIONAL ECONOMIC OUTLOOK CONFERENCE 2019 - 2020 · prof dr saadiah mohamad 28 november 2018 the...
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PROF DR SAADIAH MOHAMAD
28 NOVEMBER 2018
The Impact of Competition Policy and Enforcement on the Economy
NATIONAL ECONOMIC OUTLOOK CONFERENCE 2019 - 2020
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PRESENTATION OUTLINE
2“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
INTRODUCTION
COMPETITIONPOLICYINMALAYSIA
THEORYOFHARM
CASES
CHALLENGES
1
2
3
4
5
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PRESENTATION OUTLINE
3“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
INTRODUCTION
COMPETITIONPOLICYINMALAYSIA
THEORYOFHARM
CASES
CHALLENGES
1
2
3
4
5
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An Overview of Competition Policy
4“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Source:Compe,,onPolicyWorks:TheEffectofCompe,,onPolicyontheIntensityofCompe,,on–AnInterna,onalCrossCountryComparison,2005
ThemainaimsofcompeDDonpolicyaretopromotecompeDDon;makemarketsworkbeMerandcontributetowards
improvedefficiencyinindividualmarketsandenhancedcompeDDvenessofbusinesses.
Compe**onpolicyaimstoensure:
✓ TechnologicalinnovaDonwhichpromotesdynamicefficiencyindifferentmarkets
✓ EffecDvepricecompeDDonbetweensuppliers
✓ Safeguardandpromotetheinterestsofconsumersthroughincreasedchoiceandlowerpricelevels
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The Importance of Competition Policy
5
MALAYSIA COMPETITION COMMISSION
• Economicbenefitsofcompe**on;
• Needforcompe**veinfrastructure;
• Compe**onpolicyandlawareessen*aldevelopmentcomponents;
• Compe**onpolicyandenforcementpromotemarketefficiencyandgrowth;
• Conversely,marketreformscannotsucceedwithoutappropriatecompe**onpolicyandlaw
Source:UNCTAD(2004),Compe,,on,Compe,,venessandDevelopment:LessonsFromDevelopingCountries
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Number of Jurisdictions with Competition Law and Competition Authority
6“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Source:OECD(2014),ChallengesofInterna,onalCo-opera,oninCompe,,onLawEnforcement&Interna,onalCompe,,onNetwork2018
138compe**onauthori*es2018
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Impact of Competition Policy to GNI Growth
7“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Source:UNCTAD,WorldInvestmentReport1997 Year
CountrieswithcompeDDonlaws,sampleof101countries
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Pillars of Competition Policy
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MALAYSIA COMPETITION COMMISSION
There are four key pillars of compe**on policy in the UK and in theEuropeanUnion
This involves the elimina*on of agreements that restrictcompe**on includingprice-fixingandotherabusesbyfirmswhoholdadominantmarketposi*on.
Liberalisa*on involves introducing compe**on in previouslymonopolis*csectorssuchasenergysupply, retailbanking,postalservices,mobiletelecommunica*onsandairtransport.
AnDtrust&cartels:
MarketliberalisaDon:
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Pillars of Competition Policy (cont.)
9“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Compe**on policy analyses state aid measures such as airlinesubsidiestoensurethatsuchmeasuresdonotdistortthelevelofcompe**onintheSingleMarket.
Thisinvolvestheinves*ga*onofmergersandtake-oversbetweenfirms(e.g.amergerbetweentwolargegroupswhichwouldresultintheirdomina*ngthemarket)
Stateaidcontrol:
Mergercontrol:
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Examples of Competition Policy in Action
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“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
• Preven*ngmergers/acquisi*onsthatcreateamonopoly• Lawstointroducecompe**onintothepostalservicesindustry• Forcedsalesofassetse.g.BAAandairportsintheUK
• Stockmarketfloata*onoftheRoyalMail• Part-priva*sa*onofNetworkRailsimilartothesell-offofHS1-
the high-speed link that connects London's St Pancras to theChanneltunnel,onalong-termconcession
De-regulaDon-lawstoreducemonopolypower:
PrivaDsaDon-transferringownership:
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Examples of Competition Policy in Action
11“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
• Strong laws and penal*es against proven cases of price fixing or
collusionthatinvolvesmarketsharing• CompaniesbreachingEUandUKcompe**onrulesriskheayfinesofup
to10percentofglobalturnover-seniorexecu*vescanbejailed
• A reduc*on in import tariffs encourages cheaper products from
overseas• Increasingorelimina*ngimportquotascanalsohavethesameeffect• Allowing new countries into the European Union single market
increasescontestability
ToughlawsonanD-compeDDvebehaviour:
ReducDonsinimportcontrols:
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Effect of Competition Policy on Intensity of Competition
12“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Source:Compe,,onPolicyWorks:TheEffectofCompe,,onPolicyontheIntensityofCompe,,on–AnInterna,onalCrossCountryComparison,2005
• Ingeneral,developedcountriesintroducecompe**onpolicyearlierthanemergingeconomiesandindustrializedcountries.
• Experienceoftheapplica*onofcompe**onlegisla*onandoverallgovernmenteffec*venessexplainasubstan*alpartofthepercep*onoftheeffec*venessofcompe**onpolicy.
• Theeffec*venessofcompe**onpolicyisofsignificantinfluenceontheintensityoflocalcompe**on.
• Incountrieswithahighintensityoflocalcompe**onthestandardoflivingishigher.
• Thenewcompe**onlegisla*onimprovesrapidlywhileestablishedcompe**onagenciesmakelielefurtherimprovementintheirapplica*onperformanceaaeracertain*me.
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PRESENTATION OUTLINE
13“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
INTRODUCTION
COMPETITIONPOLICYINMALAYSIA
THEORYOFHARM
CASES
CHALLENGES
1
2
3
4
5
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ESTABLISHMENT OF MALAYSIA COMPETITION COMMISSION
14
Competition Act 2010 (Act 712) and Competition
Commission Act 2010 (Act 713) was gazetted
on 10 June 2010.
Malaysia Competition Commission (MyCC) was established on 1
April 2011.
Competition Act 2010 came into force on 1
January 2012.
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TWO GENERAL LAWS ON COMPETITION
15“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
CompeDDonAct2010(Act712)An act to promote economic development by promo*ng andprotec*ng the process of compe**on, thereby protec*ng theinterests of consumers and to provide for maeers connectedtherewith.
CompeDDonCommissionAct2010(Act713)An act to provide for the establishment of the Compe**onCommission, to set out the powers and func*ons of suchCommission, and to provide for maeer therewith or incidentalthereto.
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COMPETITION ACT 2010 (1 JANUARY 2012)
16“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
PROCESSOFCOMPETITION
CONSUMER ENTERPRISES
ECONOMICGROWTH
• Competitive Pricing
• Choices • Quality
• Innovative • Entrepreneurship • Efficient
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MALAYSIA COMPETITION COMMISSION (MyCC)
17“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Anindependentbodyformedon1April2011(7yearsold)undertheCompeDDonCommissionAct2010toenforcetheCompeDDonAct2010(CA2010).AnagencyofKPDNHEP.
MainRolesInclude:
Inves*ga*on&Enforcement
Advocacy
Marketreview
Exemp*on
Compliance
PolicyAdvice
LeniencyRegime
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SCOPE OF LAW (EXCLUSION)
18“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
TheMyCChasthepowertoenforceCA2010onallcommercialacDviDesconductedbyanyenDtywhichoffergoodsand
servicestoconsumerinthemarket(excepDonmarketsunderMCMC,EC,MAVCOMandPetronas[upstreamonly])
i. CommunicaDonsandMulDmediaAct1998;ii. EnergyCommissionAct2001;iii. AviaDonCommissionAct2015;and
(AmendmentofFirstScheduleOrder29February2016)iv. Petroleum Development Act 1974 and the Petroleum
RegulaDons1974.(AmendmentofFirstScheduleOrder30December2013)
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MAIN PROHIBITIONS OF THE CA 2010
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“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
ANTI-COMPETITIVEAGREEMENTS
ABUSEOFDOMINANTPOSITION
ANTI-COMPETITIVEPRACTICES
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ANTI-COMPETITIVE AGREEMENTS (S.4)
20“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
ANTI-COMPETITIVEAGREEMENTS
PRICE-FIXING(HORIZONTAL)
MARKETSHARING
(HORIZONTAL)
LIMITINGORCONTROLLING(HORIZONTAL)
BIDRIGGING
(HORIZONTAL)
RETAILPRICEMAINTENANCE(VERTICAL)
EXCLUSIVEAGREEMENT(VERTICAL)
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ABUSE OF DOMINANT POSITION (S.10)
21“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
ABUSEOFDOMINANTPOSITION
UNFAIRPURCHASEORSELLINGPRICES
ORUNFAIRTRADING
CONDITIONS
PREDATORYBEHAVIOUR
APPLYINGDIFFERENTCONDITIONS
REFUSINGTOSUPPLY
TYING/BUNDLING
LIMITINGORCONTROLLING
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“DOMINANT POSITION”
22“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Asitua*oninwhichoneormoreenterprisespossesssuchsignificantmarketpowertoadjustprices,outputs
ortradingtermswithouteffecDveconstraintfromcompeDtors
Note:60%marketshareindica*veofdominance
Beingdominant(includingmonopoly)inanymarketis
notaninfringement!Source:GuidelinesonChapter2Prohibi,on,AbuseofDominantPosi,on,MalaysiaCompe,,onCommission
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TYPE OF INVESTIGATIONS
23“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
COMPLAINT SecDon15,CA2010
EX-OFFICIO(MyCC’SINITIATIVES) SecDon14(1),CA2010
MINISTERIALDIRECTION SecDon14(2),CA2010
Source:Compe,,onAct2010(Act712)
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STATISTICS OF SECTION 14 & 15 OF CA 2010 (UPDATED 31 OCTOBER 2018)
24“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
2012 2013 2014 2015 2016 2017 2018 TOTAL RECEIVED
TOTAL CLOSED
COMPLAINT 8 68 80 75 51 64 119 466 376
EX-OFFICIO 2 10 13 6 9 6 0 46 43
MINISTERIAL DIRECTION 1 2 3 1 3 0 2 12 10
Source:Inves,ga,onandEnforcementDivision,MalaysiaCompe,,onCommission
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ASSESSMENT & INVESTIGATION
25
MALAYSIA COMPETITION COMMISSION
InvesDgaDon(63)
Terengganu
Pahang
KelantanSabah
Sarawak
JohorNegeriSembilanMelaka
Selangor
Perak
Perlis
KedahPenang
IndustryunderinvesDgaDon
Terengganu
Pahang
KelantanSabah
Sarawak
JohorNegeriSembilanMelaka
Selangor
Perak
Perlis
KedahPenang
Industryunderassessment
Assessment(28)
GOVERNMENT PROCUREMENT,
AGRICULTURE, F&B, HEAVY INDUSTRY, PUBLIC TRANSPORTATION,
FINANCIAL SERVICES, SERVICES, TOURISM, MOTOR
SERVICES
GOVERNMENT PROCUREMENT,
INFORMATION TECHNOLOGY, FINANCIAL PRODUCT, SERVICES, LOGISTICS,
MANUFACTURING, BEVARAGES
Source:Inves,ga,onandEnforcementDivision,MalaysiaCompe,,onCommission
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Competition Across the Supply Chain
26
MALAYSIA COMPETITION COMMISSION
Level of compe**on across the supplychain exerts influence on final prices.Measures must focus on curbing abusivemonopolis*cpower,promo*nghealthyandfairmarket.
RETAILWHOLESALEPRODUCER
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Market Assessment in Selected Industries
27“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Source:WorldBank(2014).SynthesisReport:AssessingMarketConductthatImpedesCompe,,oninSelectedIndustries*foryear2011
• Overhalfoftheindustriesinthemanufacturingsectorlacktradecompe**veness.Inpar*cular,concentratedindustriessuchastransportequipment,lackexportcompe**veness.
• Miningandquarryingindustriesandmanufacturingarehighlyconcentrated.• OnethirdofMalaysianservicesindustriesfaceoligopolis*ccompe**on.• Poultryindustrycompe**onassessmentdealswiththreecompe**on-related
issues:ver*calintegra*onandcompe**on,pricingbehaviourandasymmetricpricetransmission,andseparategeographicmarkets.
Industry CR4HHI
2005 2010 ChangeTransportEquipment - 3,660 2,880 -780
MiningandQuarrying 76.0% 5,661 3,848 -2,164
Services 30.0% - - -
Poultryfarming 88.5% - 3,450* -
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DECISIONS
28“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Infringement NoInfringement
CameronHighlandFloriculturistAssocia*on–6Dec2012 PerdanaApartment–12Feb2015
MalaysiaAirlineSystemBerhad,AirAsiaBerhad&AirAsiaXSdn.Bhd–31Mar2014
SarawakRestaurantAssocia*on–16Apr2015
TubeIceManufacturers(TubeIce)–30Jan2015 1TubeIceManufacturer–30Jan2015
SibuConfec*onaryBakeryAssocia*on(SCBA)–12Feb2015
9SibuConfec*onaryandBakeryAssocia*on(SCBA)–16Apr2015
ContainerDepotOperators(CDOPenang)–1June2016 MyEggConsor*umSdn.Bhd.–4June2015
MyE.G.ServicesBerhad(MyEG)–24June2016 Federa*onofSta*onersandBookSellersAssocia*onofMalaysia–26Oct2015
DaycareandTui*onCentres–29Oct2018 MegasteelSdn.Bhd.–15Apr2016
DongwhaFibreboardSdn.Bhd.AndEvergreenFibreboardBhd.(Woodsellers)–7Feb2017
AveryDennisonMaterialsSdn.Bhd.AndUPMReflatacSdn.Bhd.–7Feb2017
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TOTAL FINE IMPOSED
29“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
CASE PENALTYIMPOSED
MAS&AirAsia RM20,000,000.00
TubeIceManufacturers RM252,250.00
SibuConfec*onaryandBakeryAssocia*on RM247,730.00
CDOPenang RM645,774.00
MyEGServicesBerhad RM6,412,000.00?(upto28Dec2017)
DaycareandTui*onCentres RM33,068.85
RM27,951,022.85
Source:MyCCCalcula,ons,2018
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PRESENTATION OUTLINE
30“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
INTRODUCTION
COMPETITIONPOLICYINMALAYSIA
THEORYOFHARM
CASES
CHALLENGES
1
2
3
4
5
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Effects of Competition Law
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MALAYSIA COMPETITION COMMISSION
Consumer
MarketEfficiency
EconomicGrowth&Development
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Effects Within Competition Law
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“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
CompeDDonLaw
BusinessConduct
CompeDDon
EffectsofCompeDDonLaw
DeterrentEffects
CompeDDveEffects
• Compe**on law exists primarily in order to deter business conduct thatwouldinflictcompe**veharm.
• This implies that preven*on of compe**ve harm by compe**on lawproceedsintwostepsandentailstwocause-effectrela*onships.
Source:TwoContextsforEconomicsinCompe,,onLaw:DeterrenceEffectsandCompe,,veEffects,2018
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Effects on Economic Outcomes
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MALAYSIA COMPETITION COMMISSION
1) Australian Produc*vity Commission found that the pro-compeDDvereformstoinfrastructure intheearly1990sled to price changes that boosted Australia’s grossdomes*c product by 2.5 per cent, and the averagehousehold’sincomebyA$7000perannum.1
2) The European Commission has found that theliberalizaDon of the European telecoms markets from1998hasbroughtmorecompe**ontothemarkets,andinturnbroughtmajorbenefitstoconsumersintheformoflowerpricesandbeeerservices.2
3) LiberalizaDon in the US air transportaDon led to bothlower fares and higher output. A liberal regulatoryenvironmentandlowgovernmentcontrolyieldsbusinessfaresthatarebetween20and40perlower.3
Thereisgeneralagreementamongeconomiststhatcompe**onpolicyhasastrongroleinimprovingtheproduc*vityandoverallhealthoftheeconomy.
Source:Varioussources
CompeDDonAuthoriDes
OtherPolicymakers
CompeDDoninmarkets
ProducDvitygrowth
Economicgrowth
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Impact of Competition Policy on Macroeconomic Performances
34“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Study Sample/Period MainFindingsClougherty(2010)
25jurisdic*ons.1996-2007
Posi*veimpactofan*trustbudgetoneconomicgrowth.
Petersen(2013)
154countries.1960-2005
Studyanalyzingtheimpactofan*trustlawondemocracy(nosignificantimpact)andondevelopmentandgrowth(posi*velong-termeffect).
GutmannandVoigt(2014)
179countries.1971-2012
Strongeffectongrowthandinvestment.Noeffectonproduc*vitygrowthandFDI.
Ma(2011) 101countries.(developedandDevelopingcountries)1990-2004
Nosta*s*callysignificantimpactofthecompe**onlawindexbutposi*veimpactoftheeffec*veenforcementofcompe**onlawinrichcountries(upper-middleincomeplushigh-middleincomecountriesaccordingtotheWorldBankclassifica*on).
• Anumberofrela*velyrecentstudiesaeempttoassesswhethercountrieswithcompe**onlaws• To conclude, the majority of the studies described in this sec*on find a posiDve impact of
compe**onpolicyongrowthmainlyduetoaposi*veeffectonproducDvity.Source:EU(2015),Ex-posteconomicevalua,onofcompe,,onpolicyenforcement
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ELEMENTS OF THEORY OF HARM
35“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Atheoryofharmshouldbe:
a) logicallyconsistent
b) reflecttheincen*vesthatvariouspar*esfacec) beinlinewiththeavailableempiricalevidence;and
d) ar*culatehowconsumershavebeen/willbeharmed
TheoryofHarm
Thetheoryofharmwillbeusedasaparametertodeterminewhetherconductbyfirmsinthemarketcontravenecompe**onlawprovisions(an*-compe**veagreements,abuseofdominant
posi*onandmergerprohibi*on).
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PRESENTATION OUTLINE
36“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
INTRODUCTION
COMPETITIONPOLICYINMALAYSIA
THEORYOFHARM
CASES
CHALLENGES
1
2
3
4
5
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CASES: PRICE FIXING
37“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Source:DOSM,MyCCCalcula,ons,2018
IceManufacturersBriefFacts • 25 icemanufacturerswhoagreed to increase thepriceofedible
tube iceby50senperbagand thepriceofblock icebyRM2.50perbigblockfromJan1,2014.
• Enterprises were found to have infringed s 4(2)(a) of theCompe**onAct2010.
Est.PopulaDon 7,209,175(KlangValley,Selangor&Putrajaya)
EsDmatedConsumpDon
3,605.88Bag/dayfor50%oflocalpopula*on
1,316,144.37Bags(est.annualconsump*on)
Pricefixing Pre-fixing:RM2.00/bag,Post-fixing:RM2.50/bag
Costsbornebyconsumers:RM0.50/bag
IntervenDon FineImposed:RM252,250.00
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CASES: PRICE FIXING (cont.)
38“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Source:DOSM,MajlisPembandaranSibu,MyCCCalcula,ons,2018
SibuConfecDoneryandBakeryAssociaDon
BriefFacts • MyCCfound15enterprisestohaveinfringeds4oftheCompe**onAct2010inrela*ontoapricefixingagreementbetween24enterpriseswhoweremembersoftheSibuConfec*oneryandBakeryAssocia*on
• TheSCBAwasfoundtohaveengagedinanan*-compe**veconductbyagreeingtoincreasethepricesofconfec*oneryandbakeryproductsby10-15%inSibu
Est.PopulaDon 299,768(Sibu)
EsDmatedConsumpDon
149,884persons(50%oftotallocalpopula*on)
749,420pcs(est.annualconsump*on,5pcsperconsumer)
Pricefixing Pre-fixing:RM2.00/pc,Post-fixing:RM2.50/pc
Costsbornebyconsumers:RM0.25/pc
IntervenDon FineImposed:RM247,730
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CASES: ABUSE OF DOMINANCE
39“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Source:DOSM,PenangPort,MyCCCalcula,ons,2018
ContainerChainandContainerDepotOperators
BriefFacts • ContainerdepotoperatorsincreasedthedepotgatechargesfromRM5toRM25andthecontainerdepotoperatorsfixingarebateofRM5offeredtohauliersinrespectofthedepotgatecharges
• Price-fixingdistortedcompe**oninthemarketfortheprovisionofemptycontainerstorage,maintenanceandhandlingserviceswithinafiveto15kmradiusofPenangPort.
CalculaDons No.ofTEUS =827,013Price/Cost(before) =RM5.00x827,013(A) =RM4,135,065Price/Cost(aaer) =RM20.00X827,013(B) =RM16,540,260
CoststoConsumers (B)–(A) =RM12,405,195
IntervenDon FineImposed:RM645,774
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CASES: ABUSE OF DOMINANCE
40“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
Source:CIDB,MyCCCalcula,ons,2018
SandOperatorsinKelantan
BriefFacts • Allegedprice-fixingbetweenagroupofsandoperatorsfortheterritoriesofKotaBharu,PasirMas,TanahMerahandMachanginKelantan.
• Theoperatorshaveundertakentorescindtheissuedpricelistofsanddated10January2017,terminateanyotheran*-compe**vebehaviourinrela*ontothepricelistaswellasissueapressreleaseoftheirundertakingtothemajornewspapers.
CalculaDons Est.annualsandconsump*on=352,997MTPrice/Cost(before) =RM14.00/Tonne(A) =RM4,941,958Price/Cost(aaer) =RM22.00/Tonne(B) =RM7,765,934
CoststoConsumers (B)–(A) =RM2,823,976
IntervenDon Removeprice-fixingarrangement
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CASES: ABUSE OF DOMINANCE
41“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
MyEGServices
BriefFacts • MyEG had violated the Compe**on Act 2010 by abusing itsdominant posi*on in harming compe**on in the downstreammarket in which MyEG Commerce is par*cipa*ng as aninsurance agent for online foreign workers' permit renewalapplica*ons.
• MyEG had imposed different condi*ons to the very sametransac*ons with its compe*tors which had harmedcompe**on in the downstream market for the sale ofmandatoryinsurances.
IntervenDon • FineImposed:
TotalpenaltyofRM2.2million
DailypenaltyofRM7,500from25June2016
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CASES: ABUSE OF DOMINANCE
42“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
GigaShippingandNexusMegaCarriers
BriefFacts • Giga and Nexus had engaged in conduct that foreclosed a newentrantintothemarkettoprovideforthetransporta*onofmotorvehiclesfrompeninsularMalaysiatovariousportsinEastMalaysia.
• At thematerial *me,Giga-Nexusmonopolizes themarket for theprovision of logis*c and/or shipment services of motor vehiclesfromPeninsularMalaysiatoEastMalaysia.
IntervenDon MyCCacceptedtheundertakingwiththefollowingcondi*onsamongstothers:
a. To remove all exclusivity clauses or clauses with the effect ofexclusivity
b. Publishtheundertakingin5majornewspapersc. Undertake to con*nue their compe**on law compliance
programd. Reimbursethecompe**oncommission’sadministra*vecosts
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PRESENTATION OUTLINE
43“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
INTRODUCTION
COMPETITIONPOLICYINMALAYSIA
THEORYOFHARM
CASES
CHALLENGES
1
2
3
4
5
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CHALLENGES
44“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
• Lowawarenessoncompe**onlaw
• Malaysiaisayoungcompe**onjurisdic*onthatrequiresincreasedtalentsandcapacitytobeatparwiththemoreestablished.
• Emergingchallengesduetodisrup*vetechnologiese.g.digitaleconomy
• BesidesMyCC,Malaysiahassectorregulators(avia*on,telecommunica*ons,energy)thatincludesauthorityoncompe**on
• LimitedresourcestocarryoutpolicyimpactstudiesSource:UNCTAD(2010&2015),StudyonAwarenessandPercep,onofCA2010andMyCCinMalaysia,May2017
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CONCLUSION
45“PROMOTING COMPETITION, PROTECTING YOU”
MALAYSIA COMPETITION COMMISSION
• Hascompe**onpolicyandenforcementbeeneffec*ve???
• Numerousstudieshaveconfirmedposi*velinkbetweencompe**onpolicyandbenefitsofmarketefficiency,consumerwelfareandeconomicgrowth.ConfirmedinempiricalstudiesnotconfinedtowesterneconomiesbutJapan,SouthKoreaandotherdevelopingeconomies.
• Youngerjurisdic*onsindevelopingeconomiesfaceachallengeindevelopingtalentandcapacitytobeatparwiththemoreestablishedjurisdic*onsandbeabletorespondtotheincreasingdemandsofcomplexnatureofcompe**onwork.
• Thiscallsforhighercommitmentandresourcesbygovernmentaswellasdevelopmentofacommunityofstakeholdersconsis*ngofpoli*cians,policymakers,lawyers,economists,businessesandthepublicwhoareALLawareofcompe**onissues.