20 December 2022

Malaysia’s Competition Appeal Tribunal (“CAT”) has unanimously set aside a final decision of the Malaysia Competition Commission (“MyCC”). MyCC had found that the General Insurance Association of Malaysia (Persatuan Insurans Am Malaysia) (“PIAM”) and 22 general insurance companies had infringed the Competition Act 2010 (“Competition Act”) for allegedly engaging in a price-fixing cartel. In setting aside MyCC’s decision, the CAT found that there was no anti-competitive agreement entered into between PIAM and the insurance companies.

In 2016, MyCC commenced investigations in respect of the imposition of trade discounts on spare part prices by insurance companies. A final decision issued in 2020 found that PIAM and 22 other insurance companies had infringed section 4 of the Competition Act by entering into certain price fixing agreements.

In its grounds of decision, the CAT reiterated the legal position that MyCC is a quasi-judicial body tasked to assist the CAT to arrive at a fair and just decision, and that MyCC cannot seek a review of the decision of its own appellate body (i.e. the CAT). The CAT also held, among other things, the following:

  • The Competition Act does not have retrospective effect;
  • The conditions for relying on the deeming provision under section 4(2) of the Competition Act must be strictly complied with, and in this case, MyCC had failed to establish the relevant market;
  • An association that does not engage in commercial activities cannot be held liable under the Competition Act, and in this case, PIAM is a non-profit entity which does not carry out any commercial activities;
  • There is no anti-competitive agreement entered into between PIAM and the insurance companies; and
  • The arrangement between PIAM and the insurance companies is not a price fixing arrangement as it only imposed certain maximum and minimum rates in relation to part trade discounts and labour rates. The arrangement does not impose any fixed rates, and parties were still able to negotiate the rates accordingly.