Thursday 18 Apr 2024
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This article first appeared in The Edge Malaysia Weekly on November 18, 2019 - November 24, 2019

GRAB Inc, GrabCar Sdn Bhd and MyTeksi Sdn Bhd (collectively referred to as Grab) have until Dec 31 to submit their written representations to the Malaysia Competition Commission (MyCC), with regards to the commission’s proposed decision against the ride-hailing service.

MyCC CEO Iskandar Ismail tells The Edge in an interview that Grab had sought additional time to submit its written representations. “They were supposed to hand in their written representations on Nov 27, which is 30 working days from the date of receipt of the proposed decision. However, Grab wrote to us to seek additional time to do so.”

On Oct 3, MyCC issued a proposed decision against Grab for collectively breaching Section 10 of the Competition Act 2010.

MyCC alleges that Grab abused its dominant position by imposing a number of restrictive clauses on its drivers, which prevented them from promoting and providing advertising services for Grab’s competitors in the e-hailing and transit media advertising market.

MyCC also proposed to impose a financial penalty of RM86.77 million against Grab as well as a daily penalty of RM15,000 from the date of service of the proposed decision should it fail to take remedial actions as directed by the commission in addressing the competition concerns.

“We investigated Grab in terms of issues of restrictive clauses because these clauses impacted their competitors. We want the competitors to grow in the market,” says Iskandar.

In its response to MyCC’s notice on Oct 3, Grab says it was surprised by the proposed decision.

“While our legal counsels are now studying the proposed decision, we believe it is common practice for businesses to decide upon the availability and type of third-party advertising on their respective platforms, tailored according to consumers’ needs and feedback,” reads Grab’s statement.

 

Other MyCC cases

Since its incorporation in 2011, MyCC has issued 17 final decisions and four proposed decisions.

Apart from Grab, the other proposed decisions are against the General Insurance Association of Malaysia (PIAM) and its 22 members over the agreement with the Federation of Automobile Workshop Owners’ Associations of Malaysia on trade discount rates for parts of certain vehicle makes and hourly labour rates for workshops under the PIAM Approved Repairers Scheme; Dagang Net Technologies Sdn Bhd for allegedly abusing its position as a monopoly in the provision of trade facilitation services under the National Single Window; and eight enterprises for their involvement in bid rigging of Requests for Quotations and Tenders submitted to Akademi Seni Budaya dan Warisan Kebangsaan.

Since the Act came into force 2012, MyCC has received over 552 complaints from the public, 14 ministerial directions and 48 ex-officio investigations, of which it has investigated 76 cases.

“Once a proposed decision is issued against a company, it has to submit a written representation followed by an oral representation on the matter. Once these companies clarify their position to us, we ask them further questions on why we should accept their arguments that there was no infringement [of the Competition Act 2010] on their part.

“When we issue a final decision, the companies can lodge an appeal with Competition Appeal Tribunal, which is a separate body under the purview of the Ministry of Domestic Trade and Consumer Affairs. The tribunal is headed by a High Court judge.

“For example, our final decision against Malaysian Airline System and AirAsia Bhd was reversed by the Competition Appeal Tribunal. We went to the High Court for a judicial review and the High Court sided with MyCC. However, Malaysian Airline System and AirAsia have taken their case to the Court of Appeal, and it is scheduled to be heard at the end of this year,” he says.

MyCC had concluded in its final decision on March 31, 2014, that Malaysian Airline System and AirAsia had infringed Section 4(2)(b) of the Act, by entering into an agreement that had as its objective the sharing of markets within the air transport services sector in Malaysia. MyCC imposed a fine of RM10 million each on Malaysian Airline System and AirAsia.

Iskandar says MyCC takes up more significant cases as it would like to have a long-term impact with its decisions.

“For smaller cases, we run advocacy programmes. We have run over 250 advocacy programmes to date. We go for big cases where the long-term impact would be felt in the market.

“As I said before, we are not here to penalise people. We have to be careful in our decisions as they are subject to appeal, and it runs on the platform of administrative law, so it is different altogether from criminal or civil proceedings,” says Iskandar.

 

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