30 January 2023
On 17 November 2022, the Competition Appeal Tribunal (“CAT”) unanimously affirmed the Malaysia Competition Commission’s (“MyCC”) infringement finding by certain ferry services providers (“Appellants”) for entering into agreements to standardise ticket fares in respect of the transportation of vehicles via roll-on and roll-off (“Ro-Ro”) vessels.
The Appellants appealed against the MyCC’s final decision where the MyCC imposed a total fine of approximately RM2.2 million (approximately US$503,000) on the ferry services providers, after allowing a 50% reduction due to the economic impact arising from the Covid-19 pandemic on businesses.
The CAT held in its grounds of decision, among other things, the following:
- The agreements entered into by the Appellants to standardise ticket fares were horizontal agreements between enterprises to fix prices, which is prohibited under the Competition Act 2010 (“Act”);
- To invoke the deeming provision under section 4(2) of the Act, there must be a horizontal agreement entered into between enterprises which has the object to directly or indirectly fix a purchase or selling price, or any other trading condition; and
- The MyCC has correctly identified the relevant market for the provision of vehicle transportation via Ro-Ro vessels in Langkawi island, and no further quantitative analysis was required.
While the CAT generally upheld the MyCC’s findings on liability, it disagree with the MyCC's findings in respect of the computation of financial penalties for one of the Appellants (jointly, Langkawi Ferry Services Sdn. Bhd. and Langkawi Auto Express Sdn. Bhd.). The CAT partially allowed the appeal of Langkawi Ferry Services Sdn. Bhd. and Langkawi Auto Express Sdn. Bhd. and directed the computation of the deductibles for the two parties to be remitted to the MyCC in order for the MyCC to reassess the deductibles and recompute the financial penalties. This marks the first time the CAT has exercised its power under section 58(2)(a) of the Act to remit matters to the MyCC.
Partners Kwong Chiew Ee and Penny Wong of Rahmat Lim & Partners, our associate firm in Malaysia, acted for Langkawi Ferry Services Sdn. Bhd. and Langkawi Auto Express Sdn. Bhd.