28 February, 2018
On 28 December 2017, CAT dismissed My EG Services Bhd’s (“MyEG”) appeal against the Malaysia Competition Commission’s (“MyCC”) decision. MyCC had found that MyEG and its wholly owned subsidiary abused their dominant position in respect of the manner in which the online Foreign Workers Permit (“PLKs”) renewals were provisioned and managed.
MyEG and its wholly owned subsidiary (being a single legal entity — both have common directors) are considered dominant as they have the sole right for renewal of PKLs. MyEG was said to have abused its dominant position by imposing different conditions on equivalent transactions — purchases of mandatory insurances through MyEG were automatically verified whilst purchases of mandatory insurances through other parties would be subject to additional steps imposed by MyEG in the verification exercise. This caused delay in the renewal of PLKs and harmed the competitors (companies offering insurance services).
CAT found MyEG’s conduct amounted to MyEG putting pressure on foreign workers to purchase mandatory insurances from MyEG. CAT required MyEG to, inter alia, work out the system to allow automatic verification in respect of purchases made through competitors.
CAT’s decision in upholding MyCC’s decision sends across a message to all dominant enterprises to run their businesses in line with the Competition Act 2010. A dominant enterprise should be mindful when considering imposition of different terms on equivalent transactions even where the different terms involve a longer approval process.
For further information, please contact:
K Shanti Mogan, Partner, Shearn Delamore & Co
shanti@shearndelamore.com
